The U.S. Treasury Department said on Monday that it has canceled every contract it maintained with Booz Allen Hamilton, asserting the consulting firm did not adequately safeguard sensitive information obtained while working for the government, including material tied to the Internal Revenue Service.
According to the Treasury, the firm held 31 contracts with the department totaling $21 million. The department framed the termination as part of broader efforts to address waste, fraud and abuse in federal contracting and to restore public confidence in government stewardship of confidential information.
"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," Treasury Secretary Scott Bessent said. "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."
The department pointed to the case of Charles Littlejohn, a former contractor who worked for the IRS and was sentenced in 2024 to five years in prison for leaking tax records. Treasury said Littlejohn disclosed the tax records of Donald Trump and hundreds of thousands of other wealthy Americans to media organizations. The department noted Littlejohn's disclosures occurred between 2018 and 2020 while he was employed by Booz Allen Hamilton.
On Monday the Treasury said the IRS has determined that roughly 406,000 taxpayers were affected by the breach to date. The department characterized the contract cancellations as necessary steps in response to what it described as Booz Allen's failure to maintain adequate protections around the sensitive information to which it had access.
The termination affects the Treasury's 31 contracts with the consulting firm and the cited contract value of $21 million. Beyond the financial figures and the criminal case identified by the department, the announcement did not provide further operational details about the specific contracts that were canceled or the immediate logistical consequences for ongoing work tied to those agreements.
Summary of actions and findings:
- All Treasury Department contracts with Booz Allen Hamilton have been canceled - 31 contracts valued at $21 million.
- Treasury cited insufficient data safeguards, specifically referencing access to confidential IRS taxpayer information.
- The department referenced the 2024 sentencing of former IRS contractor Charles Littlejohn for leaking tax records disclosed between 2018 and 2020; the IRS has identified about 406,000 affected taxpayers to date.