Citadel founder Ken Griffin sues US tax agency over leak of records

Citadel founder Ken Griffin sues US tax agency over leak of records

Billionaire investor Kenneth Griffin has sued the Internal Revenue Service and US Treasury department over the leak of his tax records to non-profit media group ProPublica last year.

In a lawsuit filed in the Southern District of Florida, the hedge fund tycoon alleges IRS employees were able to “misappropriate” confidential tax information and leak it to ProPublica because of a lack of safeguards at the government agency.

He is seeking $1,000 in damages for each unauthorised tax return disclosure, the maximum allowed.

Griffin also accused the tax regulator of “wilfully and intentionally” failing to implement safeguards to protect confidential tax documents.

Griffin is the founder of hedge fund Citadel and market-maker Citadel Securities with a net worth estimated to be about $32bn, according to Forbes. “He is proud of his success and has always sought to pay his fair share of taxes,” according to the lawsuit.

The articles published on ProPublica last year included tax records belonging to billionaires such as Elon Musk, Warren Buffett and Michael Bloomberg.

ProPublica’s report found the 25 richest Americans had paid just $13.6bn in federal income taxes in the five years to 2018 through legal tax avoidance, even as their collective wealth rose to roughly $401bn in part because of a stock market boom.

It reignited the debate about income inequality and whether the US’s wealthiest citizens are paying their fair share of taxes while also raising questions about how the news outlet had obtained the information.

Federal authorities said they had launched an investigation into the release of confidential information to ProPublica following its publication but no conclusion has been publicly disclosed. US Treasury secretary Janet Yellen and attorney-general Merrick Garland said at the time that they were taking the matter seriously.

Griffin said in a written statement: “IRS employees deliberately stole the confidential tax returns of several hundred successful American business leaders. It is unacceptable that government officials have failed to thoroughly investigate this unlawful theft of confidential and personal information.”

In the lawsuit, Griffin cites a ProPublica article as a source that he “apparently pays” a higher effective tax rate “than many of the top wage earners in the United States”. In another article by the outlet, he is alleged to have spent $54mn fighting a tax increase on the wealthiest Americans.

Griffin relocated his family from Chicago to Florida this year, where residents do not pay individual income tax. He is also in process of moving both of his businesses to Miami, which has an attractive business tax rate.

The US Treasury declined to comment.

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