A few years ago, a rouge contractor of the Internal Revenue Service (IRS) leaked the federal tax returns of tens of thousands of American citizens and businesses in what became a significant IRS data breach. The IRS reported that a contractor named Charles Edward Littlejohn abused its position and shared with the media sensitive information belonging to approximately 70k people and entities. 

He collected the information between 2018 and 2020. The DOJ took years to sentence the criminal, but in 2023, he pleaded guilty to stealing the information. Last year, he was thrown in jail, and he is currently serving a five-year sentence. The leaked information led to dozens of articles about billionaires. Including Jeff Bezos, Elon Musk, Pether Thiel, Donald Trump, Michael Bloomberg, Warren Buffet, and Mark Zuckerberg. 

You might find this interesting: What is the difference between a data leak and a data breach?

New Findings in the incident

Even though the incident occurred years ago, on this St Valentine’s Day,  a letter from IRS Commissioner  Douglas O’Donnell disclosed that the initially released numbers had been largely understated regarding the IRS data breach. The letter was just publicized by the recipient, Jim Jordan (R, Ohio), who expressed outrage at the new findings. 

According to the newly reported information in the IRS statement, Littlejohn, now a convicted felon, broke federal law by inappropriately accessing or leaking the details of approximately 600% more people and entities than previously reported. The exact number quoted in the statement to the House Judiciary is 405,427. According to the statement, about 90% of the leaked taxpayer information belongs to businesses. When the leak was first discovered, the IRS informed all 70k affected victims of a breach. The agency is now working on notifying the rest of the affected people and organizations. And the IRS has even created an email address for businesses to contact them for further details.  

The IRS believes that the number of victims won’t rise. And that they are not expecting to release the uncovering of additional victims. It is currently unclear why it took years for the agency to notify the authorities that hundreds of thousands of people and entities have been affected by the rouge contractor. IRS Commissioner Douglas O’Donnell, who prepared the letter, is expected to retire soon.

Previous IRS Data Breaches and growing concerns

This is not the first time the IRS has experienced a significant data breach. In 2016, hackers managed to steal the information of over 300k individuals. The IRS is going through a rough time as it is currently preparing to be audited by the newly formed Department of Government Efficiency (DOGE) introduced by the new administration. Many believe that the DOGE auditors will uncover bombshell findings similar to those uncovered during the audit of the U.S. Agency for International Development (USAID). 

Continue reading: How to recognize tax scams and fraud?

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