IRS leak to ProPublica exposed more than 400,000 people, businesses

In one of the largest IRS data breaches in history, the tax records of more than 400,000 businesses and individuals were leaked to ProPublica by an IRS contractor who illegally accessed and downloaded the information between 2018 and 2020.

The IRS disclosed the information Tuesday to the House Judiciary Committee, which is investigating the data leak.

The disclosure follows reporting by The Washington Times that taxpayer information belonging to “hundreds of thousands” of taxpayers and businesses were illegally accessed and leaked to ProPublica by Charles Littlejohn, who is serving a five-year sentence for the crime.

The IRS disclosure shows the leak to the publication is far bigger than initially believed and has snared thousands of ordinary taxpayers and not just the ultra-wealthy, as both Littlejohn and ProPublica claimed. The IRS first disclosed it had mailed notices to 70,000 taxpayers informing them that their information, including Social Security numbers and other sensitive data, was leaked by Littlejohn. A new round of notices went out in December and the total impacted now amounts to nearly six times the initial estimate.

Judiciary Committee Chairman Jim Jordan, Ohio Republican, called the scope of the tax leak “a massive scandal.”

In total, the IRS reported that information from 405,427 taxpayers “was inappropriately disclosed by Mr. Littlejohn.” The agency said 89% of the taxpayers are business entities.

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ProPublica, a nonprofit journalism organization, refused to disclose the number of tax records it possesses but has described the data Littlejohn provided as both “a massive trove” and “extremely limited.”

ProPublica produced a series of news stories using the illegally leaked data that focused on the ultra-rich and how much they pay in taxes.

In January, Dallas-based Alarm Concepts Inc., a security equipment firm, sued the IRS and Booz Allen Hamilton, the IRS contractor that employed Littlejohn, over the breach.

The publication also declined to say whether it would publish additional articles exposing the tax information of individuals and businesses.

“In the essay published alongside the first article in the Secret IRS Files series, ProPublica’s editor-in-chief, Stephen Engelberg, and then-president, Dick Tofel, explained that after careful deliberation, ProPublica published select, newsworthy tax details of some of the richest Americans to inform the debate about the fairness of our tax system. These stories clearly served the public interest and we continue to stand by them,” a ProPublica spokeswoman said.

On Tuesday, a ProPublica spokeswoman denied it is in possession of the scope of tax records the IRS says Littlejohn leaked to the publication.

“As we have previously said, ProPublica only received tax information pertaining to the top .001% of individuals. The number of taxpayers notified by the IRS does not remotely reflect, and wildly overstates, the data that informed our reporting. An individual’s tax information can include dozens if not hundreds of other entities,” the spokeswoman said.

The IRS has suffered major breaches of taxpayer data in recent years.

One the largest thefts of taxpayer data occurred in 2016, when hackers used an online IRS program that provides previously filed tax returns. The hackers used the program to steal sensitive tax information from more than 300,000 individuals.

Working at the IRS as a contractor for Booz Allen, Littlejohn uploaded thousands of taxpayer records between 2018 and 2020 and provided them in a USB drive to ProPublica.

Littlejohn also leaked President Trump’s tax records to The New York Times.

Acting IRS Commissioner Douglas W. O’Donnell said he believed all of the impacted taxpayers have been notified that their information was leaked by Littlejohn, but said there could be more.

“The IRS does not anticipate any further large mailings, though there will be a relatively small number of additional notifications based on ongoing research and reconciliation work.”