Trump may settle his lawsuit against IRS for $1.7bn fund to compensate allies

Key Points:

• Former President Donald Trump is reportedly considering settling his $10 billion lawsuit against the IRS by dropping the case in exchange for a $1.7 billion fund to compensate individuals he claims were wrongfully targeted by the Biden administration, including over 1,500 January 6 rioters.
• The proposed fund would be financed through the Treasury Department’s Judgment Fund, a taxpayer-funded pool used for court judgments and settlements, raising concerns about potential self-dealing and misuse of public funds for Trump and his allies.
• Legal experts and court-appointed attorneys have questioned the legitimacy of the lawsuit, noting that Trump effectively sues his own administration and may be directing the Justice Department’s actions, undermining independent legal judgment.
• The settlement demands reportedly include a public apology from the IRS and a waiver of audits on Trump and his businesses, despite ongoing disputes over significant tax liabilities, including over $100 million related to a Chicago property.
• Critics warn that if the settlement proceeds, it would represent an unprecedented and corrupt use of government resources, potentially doubling Trump’s family net worth and exceeding the IRS budget for the 2026 fiscal year, with limited legal recourse available to taxpayers.