Trump Drops $10B IRS Suit as DOJ Launches $1.7B Lawfare Fund
CNBC reported Monday that President Donald Trump, his two eldest sons, and the Trump Organization voluntarily dismissed their $10 billion civil lawsuit against the Internal Revenue Service. The dismissal came in exchange for the Department of Justice establishing a $1.776 billion anti-weaponization fund for Americans claiming to be victims of so-called lawfare.
The Deal and What It Covers
A filing entered in a Miami federal court confirmed the withdrawal. Under the agreement, Trump also dropped two separate administrative claims. Those included alleged damages tied to the 2022 search of his Mar-a-Lago residence and what the DOJ described as the Russia-collusion investigation. Acting Attorney General Todd Blanche said the new fund would have authority to issue formal apologies and monetary relief to qualifying claimants. The fund will draw from the DOJ’s existing judgment fund, a standing appropriation used to settle federal cases. It will stop accepting new claims no later than December 15, 2028.
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Background on the IRS Leak Case
Trump originally filed suit against the IRS in late January over the unauthorized disclosure of his personal tax records. A former IRS contractor, Charles “Chaz” Littlejohn, accessed and leaked those records during 2019 and 2020. The information subsequently appeared in major publications. Littlejohn was later convicted and sentenced for the breach. That conviction formed the legal and political backdrop for the Trump family’s civil damages claim.
Also Read: What Is the DOJ Judgment Fund and How Does It Work
Political Blowback Mounts Quickly
Democratic lawmakers condemned the arrangement before it was officially finalized, warning it would effectively funnel taxpayer money to political allies of the president. The watchdog group Citizens for Responsibility and Ethics in Washington called it one of the most corrupt acts in the nation’s history. CREW President Donald Sherman argued the fund could benefit participants in the January 6 Capitol attack. Republican-aligned spokespeople pushed back, framing the deal as restitution for politically motivated government overreach against Trump, his family, and supporters during prior administrations. The DOJ said the settlement would ensure such targeting never happens again.
