Federal law fiercely protects the confidentiality of Americans’ tax returns. Not only can improper disclosure of tax information carry criminal penalties, but people can also sue the government if the Internal Revenue Service mishandles their data.
Not until Thursday, though, had a sitting president filed such a suit. President Trump’s complaint, filed in federal court in Miami against the I.R.S. and the Treasury Department, created what legal experts said was the unparalleled situation of federal agencies facing a lawsuit from the head of the executive branch. Mr. Trump has demanded at least $10 billion in damages.
“It’s an enormous conflict of interest,” said Richard Painter, the chief White House ethics lawyer in the George W. Bush administration. “His own appointees could turn around and say: ‘Let’s give the Trump family a couple of billion. That’s a fair sell.’”
Mr. Trump’s suit accuses the I.R.S. and the Treasury of not doing enough to prevent the leak of his tax returns by Charles Littlejohn, a former I.R.S. contractor who has admitted to giving Mr. Trump’s tax returns to The New York Times. Mr. Littlejohn was sentenced to five years in prison for leaking Mr. Trump’s returns, as well as tax information about ultrawealthy Americans that Mr. Littlejohn separately provided to ProPublica.
Mr. Trump, who brought the suit along with two of his sons and his family business, is not without merit, legal experts said. But its success would hinge on genuine legal questions that the Justice Department, which would represent the I.R.S., may or may not contest in court.
“It’s not a crazy lawsuit,” said Michael Eric Herz, a professor at Cardozo Law School. “It should be taken seriously and if it was anyone other than the president bringing the lawsuit you would say, ‘I can understand this.’”
The Treasury and the I.R.S. did not respond to requests for comment about how they would respond to the suit. The Justice Department and the White House declined to comment.
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The first question is whether the I.R.S. could be held liable for the conduct of Mr. Littlejohn, a contractor who worked for Booz Allen and not the I.R.S. The billionaire Ken Griffin previously sued the I.R.S. over Mr. Littlejohn’s leak of his tax returns to ProPublica, and in that case the agency argued that it was not responsible for Mr. Littlejohn’s actions. Mr. Griffin and the I.R.S. settled the case, and the agency apologized for the leak.
Another question is whether Mr. Trump has brought his lawsuit quickly enough. Under federal law, people have two years to sue the government after they discover that their tax returns have been improperly disclosed. While Mr. Littlejohn pleaded guilty in October 2023, Mr. Trump’s complaint said that he did not know that his tax return information had been leaked from the I.R.S. until he received a notice about it from the agency on Jan. 29, 2024 — exactly two years before he filed the suit.
“There was quite a bit of litigation and press coverage concerning the nature of the disclosure that Littlejohn engaged in,” said Leslie Book, a law professor at Villanova. “To argue, as Trump is arguing in the suit, that he wasn’t aware of this, that he didn’t discover it until the I.R.S. sent that letter, frankly, I find hard to support.”
Given those issues, Francesca Ugolini, a former lawyer at the Justice Department’s tax division, said that, in a vacuum, she would expect the government would try to have Mr. Trump’s lawsuit dismissed. But she is not sure that the Justice Department would want to vigorously contest the president’s claims, and Mr. Trump’s appointees may seek to settle the case.
“It’s hard to imagine that they wouldn’t feel that pressure, even if it wasn’t explicit,” she said. Congress could try to limit the Justice Department’s ability to pay a settlement to Mr. Trump, she said, but otherwise “there’s not really another check.”
Mr. Trump has previously sought to extract payments from the Justice Department, demanding that the department pay him about $230 million in compensation for the federal investigations into him. The department has also been responsive to Mr. Trump’s call for the government to prosecute people he perceives as his political enemies.
How the I.R.S. protects taxpayer information is closely scrutinized. Republicans pointed to the leak of Mr. Trump’s and other wealthy Americans’ tax information as evidence that the agency was a biased against conservatives. Hunter Biden accused the I.R.S. of improperly releasing his tax information, suing the agency while his father was president. Mr. Biden later dropped the case.
The Trump administration has sought to use protected taxpayer records at the I.R.S. to help with immigration enforcement. The I.R.S. and Immigration and Customs Enforcement reached a deal last year to share taxpayer information, though a judge later blocked the agencies from doing so.
Andrew Duehren covers tax policy for The Times from Washington.
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