Trump voluntarily drops $10 billion lawsuit against the IRS over his leaked tax records

The Justice Department announced Monday that it was establishing a $1.776 billion “Anti-Weaponization Fund” after President Donald Trump moved to dismiss a $10 billion lawsuit against the IRS over his leaked tax returns.

Get unlimited access to ad-free articles and exclusive content.

Justice Department officials announced that Trump and his co-plaintiffs would drop their IRS lawsuit, as well as other claims of damages, in connection with the 2022 search of Mar-a-Lago, his Florida home, and in connection with the Russian collusion scandal “in exchange” for creating the fund, which the Justice Department said set up a “systematic process to hear and redress claims of others who suffered weaponization and lawfare.”

The fund was established ahead of court deadlines in the IRS case, which would have required the Trump administration to explain whether there was an actual case to be heard, given Trump’s control over the Justice Department’s actions.

ABC News was first to report the settlement.

The massive fund would give Jan. 6 rioters pardoned by Trump a mechanism to seek taxpayer payouts for their claims of government overreach. The fund could even issue “formal apologies” to people who made claims against the government, the announcement said. The fund will stop processing claims by Dec. 15, 2028, about a month before Trump’s second term is set to end.

The $1,776,000,000 available for the fund was based “upon the projected valuation of future claimants’ claims,” according to the Justice Department.

Trump, speaking to reporters on Monday afternoon, said the fund was meant to reimburse “people that were horribly treated,” adding that he wasn’t involved in the fund’s creation.

Asked whether people who committed violence against Capitol Police officers should be eligible for compensation, Trump said “it’ll all be dependent on a committee being set up of very talented people, very highly respected people.”

The attorney general would appoint five members of the commission to oversee the fund, including one member to be chosen in consultation with congressional leadership, the Justice Department said, adding that Trump could remove any member.

The president did not respond to a question about whether his own family would seek compensation from the fund.

The Justice Department on Monday evening released a copy of the agreement between Trump and his administration that will result in the creation of the fund. The nine-page document was not filed in court.

A group of House Democrats called the move a “$1.7 billion slush fund” that Trump could use to “reward allies, including the nearly 1,600 defendants convicted or charged in connection with the January 6th attack on the Capitol.”

Rep. Joe Neguse, D-Colo., called the news “one of the most brazen examples of corruption we’ve seen from this administration.” The House Democrats’ Litigation Task Force filed a motion seeking to block what Rep. Jamie Raskin, D-Md., called “pure fraud and highway robbery.”

Acting Attorney General Todd Blanche, who issued a memo establishing the fund , said that the “machinery of government should never be weaponized against any American” and that the Justice Department intended to “make right the wrongs that were previously done while ensuring this never happens again.” Principal Associate Deputy Attorney General Trent McCotter said the “use of government power to target individuals or entities for improper and unlawful political, personal, or ideological reasons should not be tolerated by any Administration.”

Trump’s two elder sons, Donald Trump Jr. and Eric Trump, as well as the Trump Organization, were the other plaintiffs in the IRS case and also moved to drop the lawsuit, according to a court filing Monday .

A spokesman for Trump’s legal team said in a statement Monday that “President Trump, his family, supporters, and countless other America First Patriots were illegally targeted by the Democrat-lead law enforcement agencies, including the Department of Justice, and the IRS.” The statement added that Trump was “entering into this settlement squarely for the benefit of the American people, and he will continue his fight to hold those who wrong America and Americans accountable.”

The White House referred questions about the filing to the Justice Department. Representatives for the Treasury Department and the IRS did not immediately respond to requests for comment.

Trump, his sons and the Trump Organization sued in January , alleging that the IRS and the Treasury Department failed to prevent a former IRS employee from leaking their tax returns.

On Monday, after Trump’s move to dismiss the lawsuit, U.S. District Judge Kathleen M. Williams ordered the case closed, canceling all corresponding deadlines.

The Trump administration had been facing a Wednesday deadline to explain “whether a case or controversy exists,” given Trump’s control over the Justice Department, and outside legal experts had told Williams that it could be “useful” for the court to look into whether the attorneys representing the government were “insulated” from the president.

“This case is unprecedented: A sitting president seeks monetary damages for alleged harm to his personal interests from an executive agency that he controls. That presents significant Article III subject matter jurisdiction concerns,” the experts wrote .

“The Court might ask why DOJ’s approach to litigating this case appears to depart from its approach in similar cases, as well as what steps Defendants are taking to ensure that settlement discussions are conducted at arm’s length and without risk of collusion,” they continued.

Trump’s personal lawyers argued in Monday’s filing that the court did not have to weigh in because they were voluntarily dismissing the case and the administration never replied to the suit.