President Donald Trump is reportedly preparing to drop his $10 billion lawsuit against the Internal Revenue Service (IRS) in exchange for the establishment of a taxpayer-funded compensation fund for his allies, according to sources familiar with the matter who spoke to ABC News.
Details of the Proposed Settlement
The lawsuit, filed in January, accused the IRS of failing to prevent the unauthorized disclosure of Trump's tax returns to The New York Times in 2019. Under the proposed agreement, the government would create a $1.7 billion fund to compensate individuals and organizations associated with Trump, including approximately 1,600 people charged in connection with the January 6 Capitol attack.
Additional terms include a public apology from the IRS and the inclusion of two separate lawsuits against the Justice Department, totaling $230 million. While Trump himself would not directly receive payments from the fund, associated entities would not be explicitly barred from receiving compensation. Moreover, Trump would retain the authority to remove members of the commission overseeing the fund, which would not be required to disclose its payment procedures.
Background and Implications
The original lawsuit alleged that the IRS's negligence led to the publication of Trump's tax returns, a significant breach of privacy for a sitting president. The proposed settlement has drawn criticism from transparency advocates, who argue that the fund could be used to reward political allies without adequate oversight. The deal, if finalized, would mark a notable resolution to a high-profile legal battle between Trump and the federal government.
