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US Internal Revenue Service (IRS).
Photo: Patrick Semansky / AP
A former external contractor for the US tax authority IRS is to go to prison because, among other things, he breached the tax data of then US President Donald Trump between 2018 and 2020. As the US Department of Justice announced, a court in Washington sentenced the 38-year-old to five years in prison on Monday.
"Today's verdict is a clear signal that those who violate laws protecting sensitive tax information must expect significant penalties," said the responsible public prosecutor Nicole Argentieri. The convicted man abused his position to disclose private information of thousands of citizens.
Search queries disguised to get information
Last year, the man pleaded guilty to passing on tax data for Trump and other super-rich people such as Jeff Bezos, Elon Musk and Warren Buffett to two US media companies in his role as an adviser to the IRS. Court documents show how he deliberately disguised his search queries in the US Treasury system in order to first obtain the desired information unnoticed and then download it, among other things, to a personal iPod.
Based on the tax data, the New York Times and the investigative platform ProPublica published several studies intended to show how little federal income taxes extremely wealthy Americans pay in relation to their income. Accordingly, Trump, Amazon boss Bezos and Tesla boss Musk paid no US income taxes at all in some years. Stock market guru Buffett, who repeatedly publicly advocates for higher taxes for top earners, paid the lowest taxes of the 25 richest Americans at the time from 2014 to 2018, according to ProPublica.
The revelations made waves in the US and shone a spotlight on tax loopholes for the super-rich. Unlike most citizens, the wealth of billionaires like Bezos and Co. usually comes less from their income than from increases in the value of assets such as stocks. However, apart from their dividends, they are only taxed when they are sold. In addition, the tax burden can be reduced due to loans or investment losses. According to ProPublica, taking out large loans using stock holdings as collateral is part of the arsenal of legal methods used by the super-rich to avoid taxes.
The Justice Department did not name the victims or the media in the indictment, but the description and time frame are consistent with reports of rich Americans' tax revelations.
kfr/AP/dpa