A long-forgotten Trump tax return leak just came back to haunt Booz Allen Hamilton

The Treasury Department announced it is canceling all contracts with consulting firm Booz Allen Hamilton following a years-old breach involving the tax returns of President Donald Trump and other wealthy Americans. The move was announced by Treasury Secretary Scott Bessent and immediately affected the company’s market standing. The decision follows the fallout from an unauthorized disclosure of sensitive taxpayer data by a former employee.

As reported by Business Insider, the Treasury Department currently holds 31 contracts with Booz Allen Hamilton. Canceling those agreements cuts $4.8 million in annual spending and $21 million in total obligations. Booz Allen Hamilton’s stock fell more than 11% by early afternoon after the announcement.

The action traces back to a massive data leak that occurred years earlier but continued to reverberate through federal oversight reviews. Treasury officials said the firm failed to adequately safeguard the confidential information it accessed through contracts with the Internal Revenue Service. The action comes amid a broader swirl of political news this week, such as Trump’s aggressive oil strategies getting backlash from Republicans.

Years-old breach finally triggers consequences

Treasury Secretary Scott Bessent said Booz Allen Hamilton did not implement sufficient protections for the sensitive taxpayer data available through its government work. In a statement, he said the firm failed to maintain adequate safeguards for confidential information accessed under IRS contracts. That determination formed the basis for the termination of all current agreements. The situation on data oversight has resonated in other arenas, like when public safety advice went viral during extreme weather conditions.

The breach centered on Charles Edward Littlejohn, a former Booz Allen Hamilton employee who leaked tax return information belonging to thousands of taxpayers. Those affected included President Trump and Elon Musk, and the IRS later confirmed that roughly 406,000 individuals were impacted. Littlejohn pleaded guilty in 2023 to unauthorized disclosure of tax return information and was sentenced last year to five years in prison.

Booz Allen Hamilton has disputed the claim that its internal systems were responsible for the breach. A company spokesperson said the firm has zero tolerance for illegal activity and emphasized that the misconduct occurred on government systems, not on systems managed by the company. The firm also said it does not store taxpayer data on its own networks and cannot monitor activity on government infrastructure.

The company acknowledged that Littlejohn’s actions occurred more than five years ago and said it fully supported the government’s investigation into the leak. Booz Allen Hamilton added that it plans to discuss the matter further with the Treasury Department as the contract cancellations take effect.