Donald Trump may settle his $10bn lawsuit against the Internal Revenue Service (IRS) by agreeing to drop the case in exchange for a $1.7bn fund to compensate people he claims were wrongfully targeted by the Biden administration, according to reports by ABC News and the New York Times. The fund, which would be drawn from the Treasury Department's Judgment Fund, could benefit over 1,500 January 6 rioters among others.
The unprecedented self-dealing maneuver would see taxpayer dollars potentially transferred to the US president or his allies. Trump's January lawsuit alleged that the IRS leaked his personal tax returns to the New York Times and ProPublica during his first term, seeking $10bn in damages. A contractor, Charles Littlejohn, was sentenced to five years in prison for the leak in January 2024.
Under the settlement discussions, Trump is also reportedly asking the IRS to issue a public apology and waive an audit of Trump, his family, and his businesses. A New York Times investigation found Trump could owe over $100m in back payments on a Chicago property if the IRS revised its tax bill.
Critics have condemned the move. Donald Sherman of Citizens for Responsibility and Ethics in Washington said: 'This president continues to demonstrate that he is the most stunningly corrupt chief executive this country has ever had.' The federal judge overseeing the case, Kathleen Williams, has raised concerns about whether a genuine legal controversy exists, noting that 'you can't sue yourself.'
Court-appointed attorneys filed a brief on 14 May suggesting there was 'reason to believe that the President is, in fact, exercising his control over the Defendants in this litigation.' They recommended investigating whether Trump meddled in Justice Department decision-making. The case highlights Trump's use of the Justice Department for personal ends, with acting Attorney General Todd Blanche reportedly willing to carry out Trump's wishes.
