Trump settles IRS lawsuit, sets up $1.7B fund for claims of “weaponization”

President Trump and the Justice Department reached a $1.7 billion settlement in the president’s lawsuit against the Internal Revenue Service and Treasury Department over the leak of his tax returns, Acting Attorney General Todd Blanche announced Monday.

The Justice Department said that Mr. Trump and the other plaintiffs in the suit — two of his sons and the Trump Organization —will receive a formal apology but “no monetary payment or damages of any kind.” Instead, a $1.776 billion “Anti-Weaponization Fund” will be created at Blanche’s direction to “provide a systematic process to hear and redress claims of others who suffered weaponization and lawfare.”

The announcement came hours after court filings indicated a settlement had been reached.

Mr. Trump had accused the agencies of unlawfully allowing a government contractor to leak his tax returns and those of his sons and company. The lawsuit, initially seeking $10 billion, was filed in Miami federal court in January in Mr. Trump’s personal capacity, and alleged the government mishandled his tax returns, leading to their improper disclosure to media outlets in 2020. Mr. Trump’s sons, Eric Trump and Donald Trump Jr., and the Trump Organization are also plaintiffs in the suit. 

Mr. Trump and his legal team also agreed to drop their administrative claims against the Justice Department after he asked the government to pay him about $230 million to settle two federal damage claims over investigations targeting him during both his first administration and the Biden administration, the department said.

The department said that the fund, which will consist of a commission of five members appointed by the attorney general, will have the power to issue formal apologies and issue monetary relief owed to claimants. 

The department said the fund will stop processing claims on Dec. 15, 2028, just over a month before whoever wins the next presidential election would be inaugurated. Any money remaining in the fund will revert back to the federal government, the department said. 

“The machinery of government should never be weaponized against any American, and it is this Department’s intention to make right the wrongs that were previously done while ensuring this never happens again,” Blanche said in a statement. “As part of this settlement, we are setting up a lawful process for victims of lawfare and weaponization to be heard and seek redress.” 

Last week, ABC News was first to report that the suit was expected to be dropped in exchange for the creation of such a fund. 

A spokesperson for the Trump legal team said in a statement that Mr. Trump “is entering into this settlement squarely for the benefit of the American people, and he will continue his fight to hold those who wrong America and Americans accountable.” 

In a court filing in April, both sides in the case asked for an extension on deadlines in the case in order to “engage in discussions designed to resolve this matter and to avoid protracted litigation.”

In a footnote at the bottom of Monday’s filing, Trump’s lawyers argued that the motion to dismiss is “self-executing” and does not require a judge to sign off on the apparent settlement — or the motion to dismiss — effectively bypassing U.S. District Judge Kathleen M. Williams, who was assigned the case in the Southern District of Florida. 

“No judicial analysis is appropriate,” after the dismissal, Mr. Trump’s legal team said. 

Last month, Williams ordered a hearing on whether the Constitution allowed Mr. Trump to sue his own government.

“Although President Trump avers that he is bringing this lawsuit in his personal capacity, he is the sitting president and his named adversaries are entities whose decisions are subject to his direction,” Williams wrote, adding, “it is unclear to this Court whether the Parties are sufficiently adverse to each other so as to satisfy Article III’s case or controversy requirement.”

In a court filing Monday, 93 Democratic members of Congress attempted to intervene in the case, arguing any settlement would “siphon billions of taxpayer dollars into the pockets of the President, his family, and his allies.”

Last year, Mr. Trump and his legal team asked the Justice Department to pay him about $230 million to settle two federal damage claims over investigations targeting him during both his first administration and the Biden administration, according to a source familiar with the claims. It’s unclear if those claims will also resolved by this settlement.