Treasury cancels contracts with Booz Allen Hamilton

Companies with federal government contracts may want to beef up their cybersecurity. The US Treasury is talking about “waste and fraud” again.

According to a Monday press release, the Treasury Department canceled all its contracts with consulting firm Booz Allen Hamilton, alleging that the firm failed to protect sensitive taxpayer information it accessed from the Internal Revenue Service.

“President Trump has entrusted his cabinet to root out waste, fraud, and abuse, and canceling these contracts is an essential step to increasing Americans’ trust in government,” Secretary of the Treasury Scott Bessent said in the release.

The Treasury said it canceled 31 separate contracts worth $21 million with Booz Allen Hamilton, specifically citing the case in which a former Booz Allen employee, Charles Littlejohn, stole and leaked tax returns from the IRS between 2018 and 2020.

Littlejohn was accused several years ago of leaking the tax records of some of the country’s wealthiest citizens, including President Donald Trump and Elon Musk, to national media outlets.

“Booz Allen failed to implement adequate safeguards to protect sensitive data, including the confidential taxpayer information it had access to through its contracts with the Internal Revenue Service,” Bessent said.

In an emailed statement, Booz Allen Hamilton spokesperson Brian P. Hale told CFO Brew that the firm “fully supported” the investigation into the leak and that “the government expressed gratitude for our assistance.”

“When Littlejohn’s criminal conduct occurred more than five years ago, it was on government systems, not Booz Allen systems. Booz Allen stores no taxpayer data on its systems and has no ability to monitor activity on government networks,” Hale added.

According to the DOJ case record, Littlejohn accessed the tax returns from an IRS database and “evaded IRS protocols established to detect and prevent large downloads or uploads from IRS devices or systems.”

Littlejohn pleaded guilty to felony charges related to the breach in 2023, and was sentenced in 2024 to five years in prison. The Treasury said the IRS determined that more than 400,000 taxpayers were affected by the incident.

Booz Allen Hamilton’s stock price was down around 10% as of midday Monday.

Keeping digital corporate data safe from hackers isn’t a new practice, but companies are now spending millions to ensure those protections are ironclad. According to business research firm Forrester, cybersecurity spending is expected to exceed $200 billion in 2026.