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Ken Griffin, CEO of investment firm Citadel, sued the Internal Revenue Service and the Treasury Department today for what he says was “illegal disclosure of tax return information.” Griffin’s secret”.
Starting in 2021, ProPublica began publishing The Secret IRS Files, a series about the tax avoidance techniques of the ultrawealthy. The series is based on IRS tax information covering thousands of wealthy Americans for more than 15 years. The article explained how Elon Musk, Jeff Bezos and other billionaires keep their income tax rates lower than the average American and how some billionaires can go years without paying taxes.
Republican members of Congress have repeatedly criticized the IRS for what they say is a data breach and have vowed to investigate now that the party has regained the majority in the House. of 2023. Griffin is one of the top Republican donors in the country.
The Treasury Department’s inspector general for the Internal Revenue Service and the Justice Department said they are investigating the tax disclosures. The IRS did not immediately respond to a request for comment on the lawsuit.
Two ProPublica stories this year revealed Griffin’s income in recent years and his tax payments.
The lawsuit, filed in federal court in the Southern District of Florida, alleges that the IRS “knowingly, or at least negligently or intentionally made these illegal disclosures.” gross negligence.”
“Despite knowing its security deficiencies for more than a decade, the IRS has failed to establish adequate administrative, technical and physical safeguards to ensure the protection of confidential tax information, including Mr. Griffin’s confidential tax information,” he said. “IRS agents took advantage of these willful failures to manipulate Mr. Griffin’s confidential tax information and release that information to ProPublica for further disclosure.
Griffin, whose net worth is estimated by Forbes at $32 billion, is seeking $1,000 per “unauthorized” disclosure action, citing specific IRS statutes, as well as unspecified statutory damages, with taxpayers paying the costs. – law.
In a statement, Griffin’s spokesman wrote: “IRS agents deliberately stole the confidential tax returns of hundreds of successful American business leaders. It is unacceptable that government officials failed to conduct a thorough investigation into this illegal theft of privacy and personal information. Americans expect our government to uphold our country’s laws when it comes to our personal and private information – whether it’s tax returns or health records. “
He did not respond to questions about how much the legal effort was for him.
In an article published with the first article in the Secret IRS Files series, ProPublica editor-in-chief Stephen Engelberg and then-president Dick Tofel explained that ProPublica publishes tax information “very selectively and carefully” because “we believe it serves the public interest in a fundamental way, allowing readers to see patterns that have been hidden until now.” The Secret Series IRS Files sparked a wide-ranging conversation about the integrity of the US tax system, and a number of legislative proposals followed, including the Biden administration’s proposal to tax billions.
ProPublica declined to comment on how and when we obtained the tax information or comment on the leak investigation. We do not know the source or source of the tax information.
In an April story about America’s highest earners and the taxes they paid, ProPublica reported that Griffin had the fourth-highest income in the country between 2013 and 2013. and 2018, according to the data. He reported an average annual income of nearly $1.7 billion. Griffin paid a tax rate of 29.2% during those years, a rate higher than most hedge fund managers but lower than the top tax rate of 40%.
That article explained that while our system is designed to make the wealthy pay higher rates than everyone else, it doesn’t work that way for those at the top of the income pyramid. In general, they pay much lower taxes than the merely wealthy. And even among the top 400 earners, people from some industries have it better than others: Tech billionaires pay lower rates than hedge fund managers.
In response to that article, Griffin’s spokeswoman said the tax rate in the IRS database “significantly underestimates” what Griffin pays, as it was lowered by donations. Fees are charitable and do not reflect local and state taxes. He also said Griffin pays foreign taxes, which are not included in the IRS calculation of the effective tax rate.
In a second story, ProPublica showed how much Griffin was able to get from paying to fight to raise the income tax in his home state of Illinois. He spent 54 million dollars fighting this tax. The effort was successful and growth came down to defeat.
The campaign costs are worth it for Griffin. Based on his previous income, his salary could reach 80 million dollars a year. (Later, Griffin moved from Illinois to Florida, which has no state taxes.)
In another series on the IRS, this one from 2018, ProPublica highlighted how the agency was broken up. Congress, led by Republicans after the Tea Party wave of elections in 2010, again cut the IRS budget, leading to the loss of billions in funding. Tens of thousands of IRS employees are gone. Control, especially of wealthy Americans and the largest corporations, has been reduced. Criminal investigations into tax evasion have dropped dramatically.
During years of budget cuts, IRS commissioners repeatedly pleaded with Congress to increase funding. This year, as part of the Inflation Reduction Act, Congress provided $80 billion over ten years to the agency to rebuild the system and hire workers.