By Tom Ozimek
Contributing Writer
President Donald Trump’s attorneys on Monday filed a court notice voluntarily dismissing his $10 billion lawsuit against the IRS and the U.S. Treasury Department, in a case that accused the agencies of failing to prevent a former contractor from leaking Trump’s tax returns to the media.
No reason was stated in the Monday motion, which asks the court to dismiss the case with prejudice, meaning Trump and the other plaintiffs cannot bring the same claims again in the future. A court filing in April indicated that talks were underway to settle the case, with the parties stating at the time that discussions were taking place “productively to avoid protracted litigation.”
Monday’s filing said the IRS and Treasury Department had neither filed an answer nor moved for summary judgment, allowing the plaintiffs to dismiss the action unilaterally without requiring court approval or government consent.
Trump, along with two of his sons and the Trump family business, sued the IRS and the Treasury Department in January, accusing both agencies of failing to take mandatory precautions to prevent former IRS contractor Charles “Chaz” Littlejohn from illegally obtaining access to their tax records and disclosing that information to The New York Times and ProPublica.
The lawsuit alleged that Littlejohn had “staff-like access” to confidential tax return information and exploited weaknesses in IRS safeguards to obtain and leak the records between 2019 and 2020.
Lawsuit Details
The lawsuit, filed in the U.S. District Court for the Southern District of Florida, sought at least $10 billion in damages and accused the IRS and the Treasury of violating federal privacy laws governing taxpayer information.
Trump brought the suit in his personal capacity, while Donald Trump Jr., Eric Trump, and the Trump Organization were also named as plaintiffs.
Littlejohn, who at the time was employed by defense contractor Booz Allen Hamilton, was accused of having improperly accessed and disclosed tax information related to Trump and affiliated entities, including business holdings.
The plaintiffs claimed Littlejohn’s actions caused “reputational and financial harm, public embarrassment, unfairly tarnished their business reputations, portrayed them in a false light, and negatively affected President Trump, and the other plaintiffs’ public standing.”
The lawsuit argued that IRS and Treasury safeguards were so inadequate that the agency took roughly three years to detect the breach.
“Defendants had a duty to safeguard and protect plaintiffs’ confidential tax returns and related tax return information from such unauthorized inspection and public disclosure,” the complaint alleged, pointing to the need for the agencies to have in place appropriate technical, employee screening, and monitoring systems to prevent Littlejohn’s actions.
“Defendants failed to take such mandatory precautions.”
Littlejohn pleaded guilty in October 2023 to one count of unauthorized disclosure of tax return information.
Prosecutors said he used broad search parameters to conceal his activities, uploaded stolen data to a private website to avoid IRS monitoring systems, and stored records on personal devices before providing them to media outlets.
In January 2024, U.S. District Judge Ana Reyes sentenced Littlejohn to five years in prison, the maximum sentence permitted under the statute. Reyes described the breach as the “biggest heist” in IRS history.
“It cannot be open season on our elected officials,” Reyes said, noting that Littlejohn purposefully sought his job at least in part to obtain and leak tax information.
Before Monday’s voluntary dismissal, the case had appeared to be moving toward a possible resolution in recent weeks.
In an April 17 filing, attorneys for Trump and the Justice Department jointly requested a 90-day pause in proceedings to allow settlement negotiations to continue.
The IRS and the Treasury Department did not immediately respond to requests for comment on the dismissal filing.
