Shares of the consulting firm fell 10 percent.
Because Booz Allen Hamilton failed to install safeguards to protect sensitive data, a total of 31 separate contracts worth $21 million were axed, according to a statement from the department.
"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.”
Between 2018 and 2020, Booz Allen Hamilton employee Charles Edward Littlejohn leaked Trump's tax filings, as well as those of billionaires Jeff Bezos and Elon Musk, to news organizations.
The data breach impacted approximately 406,000 taxpayers, the IRS said.
Littlejohn admitted to handing Trump’s tax information to The New York Times and records relating to wealthy individuals to ProPublica.
In October 2023, Littlejohn pleaded guilty to felony counts for the unauthorized disclosure of protected tax information. He was later sentenced to a maximum of five years in prison.
The decision comes days after Booz Allen Hamilton released its quarterly earnings report. Traders cheered as the company topped market estimates and bolstered its profit and revenue outlook amid cost-cutting efforts.
The company's stock declined as much as 10 percent to around $92 a share to kick off the trading week. While it remains up 8 percent this year, shares have declined almost 32 percent over the past 12 months.
"Those priorities were to reduce our cost, accelerate our transition to outcome-based contracting and product sales, and focus our investment by doubling down on proven growth vectors like cyber, national security, partnerships, and AI," he said.
Additionally, Booz Allen is still securing federal contracts.
The company was awarded a $99 million contract with the Navy's Military Sealift Command and $10 million in cybersecurity work for the Department of Defense.
The Epoch Times has reached out to Booz Allen Hamilton for comment.