Trump Family Drops $10 Billion IRS Lawsuit After Deal

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Trump Family Drops $10 Billion IRS Lawsuit After Deal

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President Donald Trump, his sons, and The Trump Organization dropped their $10 billion lawsuit against the IRS and the Department of the Treasury on May 18, 2026, just two days before a court-mandated deadline regarding jurisdictional questions. The lawsuit, initiated on January 29, 2026, claimed that the IRS and Treasury willfully failed to safeguard their tax information, which was subsequently leaked by former IRS contractor Charles E. Littlejohn. Littlejohn was sentenced to five years in prison in 2024 for leaking tax data to news organizations. The suit sought at least $10 billion in damages, arguing that each view of a news article containing the leaked data constituted a separate statutory violation.

The dismissal came as the Department of Justice (DOJ) announced the creation of a $1.776 billion “Anti-Weaponization Fund”. This fund is intended to compensate individuals who claim they were victims of government “weaponization or lawfare”. Critics, including many Democrats, have labeled the fund a “slush fund” and raised concerns about its lack of public oversight and the potential for it to funnel taxpayer dollars to the president’s political allies. The agreement, signed by acting Attorney General Todd Blanche, also includes a provision that “forever” bars the IRS from auditing past tax returns of President Trump, his family, and related companies.

U.S. District Judge Kathleen M. Williams, who had been overseeing the lawsuit, had questioned whether a legitimate controversy existed, given that President Trump, as plaintiff, also oversees the agencies he was suing. On May 28, 2026, a group of 35 retired federal judges asked the court to reopen the lawsuit and investigate whether the unusual agreement to create the fund was an act of fraud, arguing that the parties tried to shield the conduct

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