The Treasury Department announced Monday it is canceling 31 contracts with consulting giant Booz Allen Hamilton, citing the company’s failure to implement adequate safeguards after a former contractor leaked sensitive tax information, including President Donald Trump’s returns, to media outlets.
In a statement announcing the cancellations, Treasury said the decision was driven in part by the actions of Charles Edward Littlejohn, a former Internal Revenue Service contractor who stole and disclosed confidential tax records belonging to hundreds of thousands of Americans. Treasury said the breach ultimately affected 406,000 taxpayers.
Littlejohn provided tax data to The New York Times and ProPublica between 2018 and 2020 after figuring out how to extract the information without triggering internal alarms, according to prosecutors. He later pleaded guilty and was sentenced to five years in prison for leaking tax information.
Treasury Secretary Scott Bessent said Booz Allen failed to protect the highly sensitive data it accessed through its work with the IRS.
“Booz Allen failed to implement adequate safeguards to protect sensitive data, including the confidential taxpayer information it had access to through its contracts with the Internal Revenue Service,” Bessent said in the department’s statement.
According to Treasury, Littlejohn disclosed more than a decade’s worth of tax returns for thousands of individuals. Those disclosures included President Trump’s returns, which media outlets reported showed he paid $750 in federal income taxes in 2016 and 2017.
Treasury said the 31 canceled contracts represented about $4.8 million in annual spending and $21 million in total obligations. The move marks a significant rebuke of the firm’s role in the wake of one of the most sweeping taxpayer data breaches in U.S. history.
The contract cancellations come shortly after the Pentagon announced it would discontinue a Defense Health Agency consulting contract involving Accenture, Deloitte, Booz Allen, and other firms, signaling a broader reassessment of outside contractors across the federal government.
Booz Allen responded with surprise, pushing back on Treasury’s decision and disputing the suggestion that the breach reflected failures within the company’s own systems.
“Booz Allen has zero tolerance for violations of the law and operates under the highest ethical and professional guidelines,” a company spokesperson told The Hill. The spokesperson said Littlejohn’s criminal actions occurred more than five years ago and took place on government systems, not Booz Allen’s internal networks.
The company emphasized that it does not store taxpayer data on its own systems and does not have the ability to monitor activity on government networks where the breach occurred.
“Booz Allen stores no taxpayer data on its systems and has no ability to monitor activity on government networks,” the spokesperson said.
Booz Allen also said it cooperated fully with the federal investigation into the leaks and played a role in bringing Littlejohn to justice.
“Booz Allen fully supported the U.S. government in its investigation, and the government expressed gratitude for our assistance, which led to Littlejohn’s prosecution,” the company said. “We were surprised by this announcement and look forward to discussing this matter with Treasury.”
Treasury’s action underscores the administration’s effort to crack down on contractors it believes failed to protect sensitive information, particularly after the unprecedented exposure of private tax records. The breach drew widespread outrage, especially after Trump’s returns were among those leaked, raising concerns about political targeting and the security of taxpayer data.
With the contracts now canceled, the department signaled it intends to hold outside firms to stricter standards when handling Americans’ most sensitive financial information, even as affected companies dispute responsibility for past misconduct.
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