Trump’s I.R.S. Lawsuit Sparks Major Conflict of Interest Debate

Federal law safeguards the confidentiality of Americans’ tax returns. Unauthorized disclosure can lead to criminal charges, and individuals may sue the government if their data is mishandled. However, President Donald Trump has taken an unprecedented step by filing a lawsuit against the Internal Revenue Service (I.R.S.) and the Treasury Department.

Presidential Lawsuit Raises Conflict of Interest Issues

Trump’s lawsuit, filed in Miami federal court, marks a historic moment. Legal experts point out that it is unusual for a sitting president to sue federal agencies under their own administration. He is seeking at least $10 billion in damages.

Renowned ethics lawyer Richard Painter commented on the potential conflict of interest, stating, “It’s an enormous conflict of interest. His appointees could turn around and say: ‘Let’s give the Trump family a couple of billion. That’s a fair sell.’”

The Background of the Case

In his complaint, Trump argues that the I.R.S. and Treasury failed to adequately prevent the leak of his tax returns. This incident was tied to Charles Littlejohn, a former I.R.S. contractor who admitted to leaking Trump’s tax information to *The New York Times*. Littlejohn was sentenced to five years in prison for this violation and for leaking additional tax data related to wealthy individuals to ProPublica.

Trump, accompanied by his two sons and his family business, presents his case as having merit. However, legal scholars note that its success depends on distinct legal issues that the Justice Department, which represents the I.R.S., may or may not contest.

Potential Challenges to the Lawsuit

One significant question involves whether the I.R.S. can be held liable for Littlejohn’s actions, as he was a contractor for Booz Allen, not directly employed by the I.R.S. Previously, billionaire Ken Griffin sued the I.R.S. over a similar leak, where the agency contended it had no responsibility for Littlejohn’s actions. This case ended in a settlement, with the I.R.S. apologizing for the leak.

Another critical consideration is whether Trump filed his lawsuit in a timely manner. Federal law allows individuals two years to sue after discovering their tax returns have been disclosed improperly. While Littlejohn pleaded guilty in October 2023, Trump claims he only learned of the leak on January 29, 2024, the exact two-year deadline for filing his suit.

• Legal expert Leslie Book expressed skepticism over Trump’s awareness of the leak, given the substantial press coverage before his formal notification.
• Francesca Ugolini, a former Justice Department lawyer, suggested that while the government might seek to dismiss the lawsuit, political pressures could influence its approach toward settlement.

Implications for Taxpayer Confidentiality

The I.R.S. is under continuous scrutiny regarding its handling of taxpayer information. Republicans have highlighted the leaks as indicative of bias against conservatives. Hunter Biden previously accused the I.R.S. of breaching his tax privacy, initiating a lawsuit that he later withdrew.

In addition, the Trump administration attempted to utilize protected taxpayer records for immigration enforcement. However, a deal between the I.R.S. and Immigration and Customs Enforcement to share this information was blocked by a judge last year.

As the case unfolds, it will be crucial to monitor how these legal and ethical concerns regarding the I.R.S. and its practices develop.