Trump Drops $10B IRS Suit as DOJ Launches $1.7B Anti-Weaponization Fund
President Donald Trump, his two eldest sons, and the Trump Organization voluntarily dismissed a $10 billion lawsuit against the Internal Revenue Service on Monday, CNBC reported. The dismissal came after the Department of Justice agreed to establish a $1.776 billion fund for people claiming to be victims of politically motivated prosecutions.
What the Settlement Covers
The new “Anti-Weaponization Fund” draws money from the DOJ’s existing judgment fund. That fund is a standing congressional appropriation used to settle legal claims against the federal government. Acting Attorney General Todd Blanche said the mechanism will allow alleged lawfare victims to seek formal apologies and financial relief. The DOJ said the fund will stop accepting claims no later than December 15, 2028.
Beyond closing the IRS case, Trump also agreed to withdraw two separate administrative claims. Those claims related to the Mar-a-Lago search conducted by federal agents and what the Trump team described as harm caused by the Russia investigation.
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Background on the Original IRS Case
Trump first filed the $10 billion lawsuit against the IRS in late January over the leak of his personal tax information. A former IRS contractor, Charles “Chaz” Littlejohn, accessed and disclosed that data to media outlets in 2019 and 2020. Littlejohn was later convicted on federal charges related to the breach. The suit named Trump, Donald Trump Jr., Eric Trump, and the Trump Organization as plaintiffs.
The case was filed in Miami federal court and had been assigned to U.S. District Court Judge Kathleen Williams. A filing deadline this week prompted Monday’s resolution.
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Democrats Push Back Hard
The settlement drew immediate criticism from Democratic lawmakers. Senator Elizabeth Warren of Massachusetts called the arrangement “corruption on steroids” and described the fund as a vehicle to funnel taxpayer money to political allies. Several other Democratic members of Congress had previously labeled the expected deal a slush fund when early reports of negotiations surfaced days prior.
Trump’s legal team rejected that framing entirely. A spokesman said the president entered the settlement “squarely for the benefit of the American people,” arguing that prior administrations had weaponized federal agencies against political opponents.
The dismissal was filed “with prejudice,” meaning Trump and the other plaintiffs cannot refile the same IRS claims in a future lawsuit.
