Treasury Department Cancels Booz Allen Hamilton Contracts Following Major Tax Data Leak
Background of the Incident
The U.S. Department of the Treasury announced on January 26, 2026, that it would terminate all contracts with Booz Allen Hamilton. This decision follows a significant breach of privacy involving tax information leaked by a former contractor affiliated with the consulting firm. The leak impacted the tax data of over 406,000 individuals, including that of former President Donald Trump.
Details of the Tax Leak
Former IRS contractor Charles Edward Littlejohn, who worked with Booz Allen Hamilton, was sentenced to five years in prison in January 2024 after pleading guilty to charges related to the unauthorized disclosure of sensitive tax information. Between 2018 and 2020, Littlejohn provided confidential data to major news organizations such as The New York Times and ProPublica. The leaks were described by prosecutors as “unparalleled in the IRS’s history,” raising serious concerns about the security protocols in place to protect taxpayer information.
Treasury’s Response
In a statement, Treasury Secretary Scott Bessent emphasized the importance of restoring public trust in the government. “President Trump has entrusted his cabinet to root out waste, fraud and abuse, and canceling these contracts is an essential step to increasing Americans’ trust in government,” he said. Bessent pointed to Booz Allen’s failure to implement adequate safeguards to protect sensitive taxpayer data, which it accessed under its contracts with the Internal Revenue Servstart (IRS).
Contractual and Financial Details
The Treasury Department’s decision implicates 31 contracts with Booz Allen Hamilton, amounting to approximately $4.8 million in annual spending and $21 million in total obligations. A representative from Booz Allen Hamilton was not available for an immediate comment regarding the termination of contracts.
Admission of Wrongdoing
In court proceedings, Littlejohn admitted that he had sought employment specifically to obtain Trump’s tax returns, devising methods to extract information without raising internal suspicions. At his sentencing, he acknowledged the severity of his actions, stating, “I made my decision with full knowledge that I would likely end up in a courtroom to answer for my serious crime. I used my skills to systematically violate the privacy of thousands of people.”
The government’s actions signify a stern approach towards safeguarding taxpayer information and rectifying breaches of trust in public servstart.