Contractor JAILED After Stealing Trump’s Tax Returns

Person filling out a tax return form with a calculator nearby

President Trump’s unprecedented $10 billion lawsuit against his own administration’s IRS could force taxpayers to fund a massive payout that he’s now considering directing to charity—but the real story reveals how federal agencies failed to protect Americans’ private tax records from illegal leaks.

Story Snapshot

Trump filed a $10 billion Privacy Act lawsuit against the IRS and Treasury on January 29, 2026, over illegal leaks of his confidential tax returns by convicted contractor Charles Littlejohn.
The President stated aboard Air Force One he’s considering settling the case by donating a “substantial amount” to charities like the American Cancer Society to avoid personal enrichment optics.
The lawsuit demands taxpayer funds equivalent to two-thirds of the IRS’s annual budget, creating an unprecedented conflict where Trump’s own appointees control the defendant agencies.
No settlement has been finalized despite sensational headlines—Trump only expressed he’s “looking to do something like that” while acknowledging the awkwardness of “suing myself.”

Illegal Leak Spawns Massive Federal Lawsuit

President Trump filed a $10 billion lawsuit in Florida federal court on January 29, 2026, targeting the IRS and Treasury Department for privacy violations stemming from illegally leaked tax returns. Charles Littlejohn, a contractor through Booz Allen Hamilton, pleaded guilty in October 2023 to stealing and disclosing Trump’s confidential tax records to The New York Times and ProPublica. Littlejohn received a five-year prison sentence for violating federal privacy laws designed to protect all Americans’ sensitive financial information. The lawsuit names Trump, Donald Trump Jr., Eric Trump, and the Trump Organization as plaintiffs, alleging the leaks harmed millions and exposed business holdings unlawfully.

Charity Donation Consideration Emerges

On January 31, 2026, Trump told reporters aboard Air Force One he’s considering settling the lawsuit by directing proceeds to charity rather than pocketing taxpayer dollars personally. He specifically mentioned the American Cancer Society as a potential beneficiary, stating “If I pay myself, that somehow will never look good” and “Nobody would care because it’s going to go to numerous very good charities.” Trump acknowledged the unusual nature of the situation, noting he would essentially be “suing myself” given his position atop the executive branch. However, no settlement has been finalized—Trump only expressed he’s “thinking about” and “looking to do something like that,” stopping short of commitment.

Taxpayer Funds at Risk in Unprecedented Conflict

The $10 billion demand represents approximately two-thirds of the IRS’s $15 billion annual budget request, raising serious concerns about taxpayer liability for government misconduct. Trump’s lawsuit creates an extraordinary conflict of interest: his own appointees at the IRS, Treasury Department, and Justice Department now control whether to settle and for how much. This dynamic fundamentally differs from typical litigation, where independent parties negotiate settlements. A similar 2022 lawsuit by billionaire Ken Griffin against the IRS for Littlejohn’s leaks resulted in zero payout and only an agency apology, as Griffin couldn’t prove financial harm despite his $51 billion net worth. Trump’s wealth reportedly tripled to $6.5 billion following the leaks, potentially undermining damage claims.

Privacy Violations Demand Accountability

The case underscores critical failures in federal safeguards protecting Americans’ confidential tax information from politically motivated disclosure. Littlejohn’s criminal conviction validates that serious federal privacy violations occurred—violations that could happen to any citizen whose personal financial data the government holds. The Privacy Act exists precisely to prevent rogue government employees from weaponizing sensitive records against individuals, regardless of political status. While the lawsuit’s massive dollar figure raises eyebrows, the underlying principle matters: federal agencies must face consequences when they fail to secure private citizen data entrusted to them. Trump’s charitable donation consideration, if genuine, addresses legitimate concerns about personal enrichment while still holding agencies accountable for misconduct that violated constitutional privacy protections.

Precedent and Political Implications Loom Large

Judge Kathleen Williams, an Obama appointee in Florida’s Southern District, will oversee the case, adding a layer of judicial independence to proceedings that otherwise involve Trump’s hand-picked agency leaders. Legal experts note significant hurdles: proving the IRS directly employed Littlejohn as a contractor and demonstrating quantifiable financial harm sufficient to justify billions. If Trump’s appointees authorize a substantial settlement using taxpayer funds, it sets a troubling precedent for future presidents extracting money from agencies they control. Conversely, if the case results in minimal payout like Griffin’s precedent, it may validate privacy claims without rewarding plaintiffs. The situation exposes tensions between legitimate accountability for government misconduct and potential abuse of executive power—a balance critical to constitutional governance and taxpayer protection.