Open Secrets

Last fall, a former IRS contractor named Charles Littlejohn copped a plea to one count of unauthorized disclosure of tax return information. Specifically, Littlejohn leaked Donald Trump’s tax returns to the New York Times in an explicit attempt to sway the 2020 election. Last week, US District Court Ana Reyes sentenced him to five years in the pokey for his offense.

Littlejohn didn’t stop with Trump. He also leaked returns from thousands of ultrahigh earners like Amazon CEO Jeff Bezos, which the independent newsroom ProPublica used for a series of stories showing how some of them manage to pay less tax than the slacker who delivers your pizza. Senator Rick Scott (R-Country Club), a former healthcare executive who saw his own data leaked, attended Littlejohn’s sentencing, where he asked the judge to throw the book at him.

Littlejohn’s lawyers told the judge that he leaked Trump‘s returns out of a “deep, moral belief” that the American public had the right to see them. They also told her that he regrets that decision, which isn’t uncommon when a prosecutor shows up and says, “I am the captain now.”

A century ago, Congress thought publicizing tax bills would help fight cheating. “Secrecy is of the greatest aid to corruption,” said Nebraska Senator Robert Howell. And so, for 1923 and 1924, tax payments were public records. Newspapers raced to report exactly how much various robber barons paid, including John D. Rockefeller (over $7 million in 1923), J.P. Morgan ($98,643.47), and Charles Schwab ($29,494.38). Not everyone liked sharing quite that much information, though, and when President Coolidge took office, he shut it down on the argument that publicizing taxpayers’ addresses made them more vulnerable to scammers. Today, of course, the scammers already have your address, along with your social security number, your mother’s maiden name, the city where you were born, and the name of your favorite pet.

What would it be like to blast everyone’s tax data to the press? Look to Finland and learn. Every year on November 1 – “Jealousy Day” – the government actually publishes it, with reporters lining up in near-Arctic cold outside the Tax Administration’s office for the 8AM “grand reveal.” Ilkka Paananen, CEO of video game developer Supercell, took first place in 2022, with €58.7 million in earnings and €21.7 million in tax. Ilkka Teppo, CEO of Supercell competitor Reworks, placed second with €46.3 million in earnings and €15.7 million in tax. Disclosure fans argue it helps avoid inequality and “gaming” the system, which seems ironic in a country where a couple of video game kingpins are the highest-paid members of society.

You could certainly argue that our rules should be the same. Property tax assessments and payment records are public. Paying income tax to (*checks notes*) the government is pretty much the definition of a public act. But that’s not how we’ve decided to handle it here. It has nothing to do with how you feel about Trump as a president, or how you feel about Bezos and his fellow billionaires as citizens. At this time in the U.S., income tax records are confidential, and the IRS needs to do whatever it takes to keep them that way.

The whole story is even more ironic considering the Service’s curious relationship with technology. On one hand, they want you to do as much of your tax compliance as possible online, including filing your return and tracking down your refund. On the other hand, they’ll warn you that if you get an email purporting to be from them, it’s probably a scam.

We do everything the law requires to keep your private information private. It’s frustrating to see those efforts wasted at the Service level. Does it help to know that at least you’re paying less with us?