Trump Drops $10 Billion IRS Lawsuit, Settles for $1.8 Billion Fund and Tax Audit Shield
Similar Articles
IRS Settles Trump Tax Leak Suit, Creates $1.8 Billion Fund and Grants Audit Immunity
Democrats Move to Block $1.8 Billion Fund for Alleged Political Prosecution Victims
Police Officers Sue to Block Payouts from $1.8 Billion 'Anti-Weaponization' Fund
Court Strikes Down Trump's Global Tariffs, Refunds to Begin
SEC Settlement With Elon Musk Over Twitter Stake Disclosure Faces Judicial Scrutiny
President Donald Trump has settled his $10 billion lawsuit against the IRS over the leak of his tax returns. The settlement creates a $1.8 billion fund to compensate individuals who claim they were victims of politically motivated prosecutions and permanently bars the IRS from auditing Trump's past taxes. The deal is now facing legal and legislative challenges from police officers and lawmakers.
Facts First
- President Trump settled his $10 billion lawsuit against the IRS and Treasury Department over the leak of his confidential tax returns.
- The settlement establishes a $1.776 billion 'Anti-Weaponization Fund' to pay individuals who allege they were targeted by political 'lawfare'.
- A separate agreement permanently bars the IRS from auditing Trump, his sons, and the Trump Organization's current tax examinations.
- A five-member commission appointed by Acting Attorney General Todd Blanche will oversee the fund and decide who receives compensation.
- Two police officers who defended the Capitol on Jan. 6, 2021, filed a lawsuit to dissolve the fund, and Democratic lawmakers are moving to block it legislatively.
What Happened
President Donald Trump, his sons, and the Trump Organization voluntarily dismissed their $10 billion lawsuit against the Internal Revenue Service (IRS) and the Treasury Department on Monday, May 18, 2026. The lawsuit was filed after a former contractor leaked Trump's confidential tax returns to media outlets. The dismissal was recorded in a Miami federal court as 'with prejudice,' preventing Trump from refiling the suit. In exchange for dropping the lawsuit, a settlement was reached. The Justice Department announced the creation of a $1.776 billion 'Anti-Weaponization Fund' intended to compensate allies of President Trump who believe they were wrongly prosecuted by the Biden administration. A separate, one-page document states the U.S. government is 'forever barred and precluded' from examining or prosecuting Trump, his sons, and the Trump Organization's current tax examinations. This document was signed by Acting Attorney General Todd Blanche, a former personal attorney for Trump.
Why this Matters to You
This settlement uses $1.8 billion from a federal fund financed by taxpayer dollars, known as the Judgment Fund, to create a compensation program for political grievances. The fund's administrators may decide to award money to a wide range of claimants, which could include individuals convicted of crimes related to the January 6 Capitol attack. The settlement also appears to shield the President and his family from certain tax audits, which may affect public confidence in the impartial enforcement of tax laws. Furthermore, the creation of this fund without direct congressional approval could set a precedent for future administrations to use similar settlement mechanisms.
What's Next
The settlement is facing immediate challenges. On Wednesday, U.S. Capitol Police officer Harry Dunn and Metropolitan Police officer Daniel Hodges filed a federal lawsuit to block individuals, including Jan. 6 rioters, from receiving payouts from the fund. In Congress, Democratic lawmakers, led by Rep. Jamie Raskin, are introducing legislation to block the fund. Some Republican lawmakers have also expressed concerns and may support efforts to impose restrictions. Acting Attorney General Todd Blanche is scheduled to appear for congressional testimony regarding the fund's rules and eligibility. The fund is scheduled to operate through December 15, 2028.