The settlement requires no monetary payment to Trump but creates a fund allowing others to file claims of government targeting
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President Donald Trump dropped his $10 billion lawsuit against the Internal Revenue Service on Monday in exchange for the Justice Department creating a $1.776 billion fund to hear and compensate claims from people who allege they were targeted by the government for political reasons.
The suit, filed in January in a Florida federal court, named the president's sons Donald Trump Jr. and Eric Trump and the Trump Organization as co-plaintiffs, with the complaint centering on allegations that the IRS failed to safeguard their confidential tax records. According to the Justice Department, the agreement provides the plaintiffs with a formal apology while ruling out any financial compensation or damages. The plaintiffs additionally agreed to pull two separate administrative claims — one tied to the Mar-a-Lago search and another stemming from the Russia investigation — as part of the deal.
Acting Attorney General Todd Blanche announced the creation of the "Anti-Weaponization Fund" as part of the settlement. "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. The fund will have the power to issue both formal apologies and monetary relief to claimants. Submission of a claim is voluntary, and there are no partisan requirements to file.
Financing for the Anti-Weaponization Fund will come from the DOJ's judgment fund, which serves as the department's mechanism for covering court-ordered settlements and judgments. A commission of five members, appointed by the attorney general, will administer the fund. Whatever money has not been disbursed by the time the fund winds down — set to happen by December 15, 2028 at the latest — will be returned to the Treasury.
Timing of the filing was notable: it arrived just ahead of a court-imposed deadline by which both sides had been ordered to explain whether the case presented an actual legal dispute sufficient to give the court jurisdiction. Judge Kathleen Williams of the U.S. District Court had previously signaled deep skepticism about the case, questioning whether the president and the executive agencies he named as defendants could be considered genuinely adversarial parties. Trump's legal team contended in their court filing, according to CNBC, that because the dismissal was voluntary, the arrangement was beyond the reach of judicial scrutiny.
At the root of the original suit was a data breach carried out by Charles Littlejohn, who, according to The Associated Press, worked as a contractor for the IRS before pleading guilty to stealing and disclosing the tax records of Trump and thousands of other Americans to media outlets, a crime for which he received a five-year prison sentence in 2024.
Democrats in Congress condemned the arrangement. In a statement, Rep. Jamie Raskin, the House Judiciary Committee's ranking Democrat, denounced the arrangement, saying it was "nothing but a racket designed to take $1.7 billion of taxpayer dollars out of the Treasury." Sen. Elizabeth Warren wrote on X $TWTR that the deal amounted to "corruption on steroids." A CNBC report noted that close to 100 House Democrats moved quickly to file an amicus brief with the court, charging the president with engaging in "blatant self-dealing."
The settlement is not the first such deal reached under the current administration. Monday's deal was not the first of its kind: CNN reported that the department had already reached agreements in two other high-profile cases — one with former national security adviser Michael Flynn, whose $50 million claim against the government yielded a payout exceeding $1 million, and another with former Trump campaign adviser Carter Page, who had sued over surveillance he was subjected to because of his Russian contacts.
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