Legal experts said President Donald Trump’s sweeping lawsuit against the IRS over the leak of his tax information raises legal and ethical questions, including whether it is proper for the head of the executive branch to pursue what amounts to scorched-earth litigation against a government agency he oversees.
The lawsuit, filed Thursday in federal court in Florida, seeks $10 billion and lists Trump and his sons, Donald Trump Jr. and Eric Trump, as plaintiffs. It alleges that the disclosure of Trump and Trump Organization confidential tax records led to “reputational and financial harm” and “public embarrassment,” and that it portrayed them “in a false light,” according to the complaint described by the Associated Press.
The disclosure traces back to a criminal case involving former IRS contractor Charles Edward Littlejohn of Washington, D.C. Littlejohn, who worked for Booz Allen Hamilton, pleaded guilty and was later sentenced to five years in prison after prosecutors said he leaked tax information about Trump and others to two news outlets between 2018 and 2020.
The lawsuit’s allegations also point to the reporting that followed the leak. The AP said the timeframe and description match stories about Trump’s tax returns published by The New York Times and reporting about taxes by wealthy Americans published by ProPublica. That reporting included The Times finding that Trump paid $750 in federal income tax the year he first entered the White House, and that he paid no income tax at all in some years following reported large losses, the AP reported.
While experts acknowledged that Trump could have a legitimate claim tied to confidentiality violations, they questioned both the size of the damages sought and the decision to pursue the case at all. The AP reported that the IRS Code section 6103 governs federal tax confidentiality and provides a legal remedy for people whose tax information is leaked, including a minimum of $1,000 per disclosure.
The AP also reported that, because Littlejohn stole tax records of other high-wealth individuals, the lawsuit could set a precedent for additional claims by other wealthy taxpayers seeking damages over unauthorized disclosures. David Gair, a tax attorney in Dallas who represents people whose information was included in the Littlejohn leak, told the Associated Press that “People are saying, well, if he can do it, then why can’t I do it,” adding that he expects “a lot more people filing similar lawsuits,” describing them as potential “piggyback” cases.
Amy Hanauer, executive director of the Institute on Taxation and Economic Policy, said the legal remedy for the leak had already been provided. She told the Associated Press that Littlejohn has been imprisoned, the Treasury Department canceled contracts with the company that employed him, and the IRS issued a rare public apology to taxpayers affected by the leak, along with pledges to strengthen data protection procedures.
Hanauer said she also worries that even if a judge rejects Trump’s demand, the IRS could still “agree” to settle and pay a large sum using taxpayer dollars. The AP reported that individuals whose tax information has been leaked do not necessarily have to prove compensatory damages, but that Trump’s request for punitive damages could change the stakes of the case.
In comments to reporters over the weekend, Trump was asked how he would manage being on both sides of the lawsuit involving the IRS. He referred to a previous complaint he filed against the Department of Justice seeking about $230 million in damages related to investigations into his 2016 campaign’s Russia ties and the 2022 Mar-a-Lago classified documents case. He added that he is “supposed to ‘work out a settlement with myself,’” and said Saturday, “I think what we’ll do is do something for charity,” suggesting any settlement could be paid to “numerous very good charities,” though a White House representative did not say which organizations would receive money.
Gair said it is difficult to believe Trump suffered real losses because of the leak, while also saying “maybe.” He suggested that showing harm could be especially challenging given that the lawsuit focuses on alleged financial and reputational damage tied to deals the Trump family business has entered since Trump won reelection.