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At the peak of the pandemic, a series of reports revealed that many of the richest Americans paid little in income taxes — and, in some years, nothing.
The 2021 stories by nonprofit news organization ProPublica were based on the actual tax returns of wealthy Americans ranging from George Soros and Elon Musk to then-Chicagoan Ken Griffin.
The stories illustrated how multibillionaires can keep more of their money out of government coffers legally by taking full advantage of deductions, credits and loopholes. Notwithstanding Griffin reportedly being the second largest individual U.S. taxpayer, they highlighted the unfairness of a system where top earners often pay far less than the average middle-class tax rate — a situation that is, in our view, un-American.
But how did ProPublica get the tax returns? Those documents are secret, and absolutely not available upon request to journalists curious about how much an individual might, or might not, be paying.
Enter Charles “Chaz” Littlejohn, a St. Louis native in his late 30s who was a consultant to the Internal Revenue Service, Treasury and other financial regulatory agencies. He’s nowhere near as famous as Edward Snowden, Chelsea Manning or even the memorably named Reality Winner, but like them he got caught leaking sensitive government information to the media.
Littlejohn has reached a plea agreement with federal prosecutors that includes a recommendation of eight to 14 months in prison, with his sentencing scheduled for Jan. 29.
The agreement describes how he pulled off his spectacular crime, and — spoiler alert — it didn’t take a computer genius to beat the out-of-date IRS.
While working as a contractor for consultancy Booz Allen Hamilton, Littlejohn was authorized to access taxpayer returns via IRS databases. In late 2018, he evaded the agency’s security system to access then-President Donald Trump’s returns, using a couple of unbelievably simple workarounds.
Instead of looking up Trump directly, for instance, he used more general parameters to collect the president’s returns along with other information. Rather than download the data to a thumb drive or other storage system, which would have raised an alarm at the IRS, he uploaded the information to a personal private website.
On Sept. 27, 2020, just weeks before the presidential election, The New York Times published a scoop based on the documents Littlejohn had stolen, entitled, “Long-Concealed Records Show Trump’s Chronic Losses and Years of Tax Avoidance.” Trump had refused to follow tradition and voluntarily release his tax returns, so the revelations were especially impactful.
Evidently emboldened, Littlejohn used the same simple technique to the steal tax returns for thousands of the nation’s wealthiest people dating back as far as 15 years. In that instance, he also used two virtual machines that simulated physical computers, which he then destroyed to cover his tracks after he had collected a mountain of information. ProPublica went on to publish more than 50 stories drawing on Littlejohn’s stolen data.
As journalists, we’re grateful when whistleblowers come to us with information and stories in the public interest. But no one should have any illusions about the criminality of Littlejohn’s conduct. In his plea agreement, Littlejohn concedes that he’d been thoroughly briefed about the secrecy of the information he worked with and the likelihood of criminal penalties if he willfully violated IRS privacy protections.
Like all Americans, the superrich have every right to expect the IRS to keep their tax returns secret and Griffin, for one, has filed suit against the agency for the unlawful disclosure of his personal information. And while the agency points out it was the victim of illegal leaks by a contractor, Griffin is said to be suing in part to compel the IRS to strengthen its security.
Amen to that.
The far right has worked hard to starve the IRS of resources for more than a decade now and gutting it has cost the country megabucks. It has encouraged tax evasion and invited cybercrimes like Littlejohn’s by making it impossible for the IRS to maintain state-of-the-art computer systems.
Chicago Tribune Opinion
This page applauded the 2022 Inflation Reduction Act’s provision for investing an additional $80 billion through 2031 to restore the agency. That expenditure is expected to return $180 billion via stronger enforcement of the tax rules: Talk about a smart investment.
Still, attacks on the IRS continue to be a populist talking point for the MAGA crowd, even though the wealthy stand to benefit by far the most from keeping the IRS weak. In November, the House GOP tried to extort IRS budget cuts in exchange for agreeing to keep the federal government open.
More creatively, a conservative group is trying an end-around at the U.S. Supreme Court, bringing a case that challenges the government’s right to impose taxes on American companies operating abroad, and on wealth as well as income. Justices hearing the case in early December were openly skeptical of it, but that doesn’t mean legal attacks on the tax system will stop.
No one loves paying taxes and few among us love the IRS. But to support our democracy, we need a more evenhanded tax code, and a stronger agency. It is not fair for a shrinking cadre of taxpayers to bear the burden of our nation’s defense, health care, law enforcement and other essential government functions while others find ways — legal or not — to shirk their rightful responsibilities.
America must have an equitable system, and it can’t happen without sustained investment in the government’s least popular entity.
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