The lawmakers quoted media reports that said Palantir employees installed at the IRS were helping the agency use the company’s software to create a “single, searchable database” of taxpayers’ records.

Palantir Technologies, Inc. (PLTR) stock is in the spotlight as a group of Democratic lawmakers sent a letter to CEO Alex Karp, seeking information regarding its federal contracts.

The letter's signees included Committee on Finance Ranking member Sen. Ron Wyden (D-Oregon) and Sen. Elizabeth Warren (D-Mass).

The probe comes at a time when Palantir stock trades near an all-time high.

The lawmakers quoted media reports that said Palantir employees installed at the Internal Revenue Service (IRS) were helping the agency use the company’s software to create a “single, searchable database” of taxpayers’ records. 

“The sensitive taxpayer data compiled into this Palantir database will likely be shared throughout the government regardless of whether access to this information will be related to tax administration or enforcement, which is generally a violation of federal law,” they alleged.

The Democratic lawmakers also claimed that the Department of Government Efficiency (DOGE), previously led by Elon Musk and comprising several former Palantir employees, had chosen Palantir for this “illegal project.” 

“The Trump Administration has spent taxpayer dollars on Palantir software at numerous other government agencies and paid it billions of dollars to conduct similar data gathering efforts,” the lawmakers said.

These included Immigration and Customs Enforcement (ICE), for which Palantir provided data to drive enforcement operations, and leads for finding people to deport, and tracked the logistics of a mass deportation effort. 

They also referred to Palantir's $795 million Department of Defense (DoD) military award for data fusion and artificial intelligence (AI) programs throughout the military, and multiple federal agencies deploying the company’s foundry software.

The team led by Wyden said, “Congress will fully investigate and hold accountable Trump Administration officials that violate Americans’ rights, as well as contractors like Palantir that profit from and enable those abuses.”

They sought from Palantir a list of all contracts with the U.S. government, including the dollar value of the contract with the agency awarding the contract, products deployed and a detailed description of the services being performed as part of the contract.

Also, the lawmakers asked the company for details about any indemnification provided by the government. 

The U.S. government accounted for over 42% of Palantir’s revenue in the first quarter of the fiscal year 2025.

On Stocktwits, retail sentiment toward the stock was ‘neutral’ (54/100) by late Tuesday, with the message volume at ‘high’ levels.

PLTR sentiment and message volume as of 3:52 a.m. ET, June 18 | source: Stocktwits

A watcher braced for a retest of the $121.78 level due to defense spending cuts and also the Congressional probe.

On the other hand, another user said the stock chart looked great, adding, “This one is consolidating nicely after a very strong bounce off the lows back in April. This is bullish to me and one of the best LT investments out there.”

Palantir stock is up 83% year-to-date.

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