Trump’s deal to drop suit against IRS creates $1.8B ‘Anti-Weaponization Fund’

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In Brief

• Trump agreed to drop his family’s IRS lawsuit under a DOJ settlement creating a $1.8 billion compensation fund.
• The “Anti-Weaponization Fund” could compensate individuals claiming political targeting by the federal government.
• Legal experts and ethics watchdogs raised concerns over conflicts of interest involving Trump and federal agencies.
• The agreement also resolves claims tied to the Mar-a-Lago search and Russia investigation disputes.

President Donald Trump has agreed to drop his family’s lawsuit against the IRS as part of a highly unusual agreement that establishes a nearly $1.8 billion fund to compensate those who, like him, have claimed they have been targets of a “weaponized” justice system.

The deal, laid out in a two-page legal document signed by acting attorney general Todd Blanche and a Justice Department news release, creates what officials described as an “Anti-Weaponization Fund“ with broad authority to distribute payments to individuals outside of the normal processes for negotiating legal claims against the government.

The effort marks the latest, and by far the most sweeping tool, the president has employed that could financially reward supporters and political allies he asserts have been wronged. The fund’s $1,776,000,000 sum is a nod to the year of the nation’s founding.

Under the settlement’s terms, Trump and his family would be excluded from receiving any money, officials said. Payments made to others would be reported quarterly to the attorney general and subject to audit, they said.

However, the department did not say Monday whether those those payments would ever be publicly reported.

The fund could result in payouts to Trump allies who have joined Trump in claiming that the justice system under Democratic administrations has been unfairly wielded to target conservatives, including the nearly 1,600 people charged in connection with the Jan. 6, 2021, attack on the U.S. Capitol.

Since Trump’s return to the White House last year, the Justice Department has paid at least $8.5 million to resolve high-profile legal claims brought by allies who allege they were improperly targeted by federal law enforcement during previous administrations, The Washington Post has reported.

“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 Monday. “As part of this settlement, we are setting up a lawful process for victims of lawfare and weaponization to be heard and seek redress.”

Legal experts and government ethics watchdogs have raised alarms about any potential deal struck to end the suit the Trump family filed against the IRS, which they worried could be potentially collusive.

They point to the fact that while the president sued the agency as a private citizen, the government officials representing the IRS and the Treasury Department in court ultimately report to him. Democratic critics have said any financial payout to him or Trump or his allies could be viewed as self-dealing between the president and agencies he oversees at the American taxpayers’ expense.

The suit – which Trump, his two eldest sons and the Trump family business filed in January – sought as much as $10 billion in damages for the theft of their tax filings by a former agency consultant, who then leaked them to news organizations.

The former contractor, Charles Littlejohn, also leaked confidential tax records filed by other wealthy Americans. He pleaded guilty and was sentenced in 2024 to five years in prison in a case a judge called “the biggest heist in IRS history.”

“The IRS wrongly allowed a rogue, politically-motivated employee to leak private and confidential information about President Trump, his family, and the Trump Organization to the New York Times, ProPublica and other left-wing news outlets, which was then illegally released to millions of people,” a spokesperson for Trump’s legal team said in a statement last week. “President Trump continues to hold those who wrong America and Americans accountable.”

Concerns of the potential conflict of interest inherent in Trump’s suit prompted U.S. District Judge Kathleen Williams, who is overseeing the case in Miami, to question last month whether the parties were “sufficiently adverse” to allow the case to proceed.

Courts have long held they have no authority to rule in cases where the parties are aligned from the start and there is no conflict between them.

“Although President Trump avers that he is bringing this lawsuit in his personal capacity,” Williams wrote, “he is the sitting president and his named adversaries are entities whose decisions are subject to his direction.”

Williams, an appointee of President Barack Obama, appointed six attorneys to advise her on the issue. They concluded in a court filing last week that the circumstances of the case “raise the specter that the defendants and their attorneys may instead be operating at the President’s direction.”

“Additionally, since taking office, President Trump has significantly expanded the President’s oversight and control over the Attorney General and DOJ, including in ways that blur the line between fidelity to the President’s policy priorities and fidelity to the President himself,” they wrote.

Williams instructed attorneys for the Trumps and the IRS to file legal briefs by May 20 explaining their stances.

The announcement of Trump’s decision to withdraw the case Monday came two days before that deadline. The president’s attorneys said in their filing that they did not believe it required judicial approval and that there was no further need for any analysis of those issues from the court.

In addition to the IRS suit, the deal announced Monday would also resolve two other legal claims the president has filed seeking hundreds of millions of dollars from the U.S. government.

One was centered on the 2022 search of his Mar-a-Lago estate as part of special counsel Jack Smith’s investigation of the president’s alleged mishandling of classified documents, the second tied to the federal investigation into Russian interference in his 2016 campaign.