Trump drops $10bn IRS suit
What happened
- Donald Trump on May 18 moved to dismiss his $10 billion IRS lawsuit as the Justice Department created a roughly $1.8 billion compensation fund. - Todd Blanche told lawmakers on May 19 he could not promise Jan. 6 assailants or Trump donors would be excluded from payouts. - Court filings dismissed the suit, and Senate questioning of Blanche on the fund’s rules began on May 19.
Why it matters
Donald Trump moved on May 18 to drop his $10 billion lawsuit against the Internal Revenue Service over the leak of his tax returns, and the Justice Department said it would create a roughly $1.8 billion “weaponization” fund as part of the settlement. Reuters and other outlets reported that the fund is intended to compensate people who say they were targeted by the federal government during Joe Biden’s presidency. The settlement does not send money directly to Trump, according to Bloomberg’s account of the agreement. A separate Justice Department addendum reported on May 19 bars the IRS from pursuing past audits or pending tax matters involving Trump, his family and his businesses. ### How did a tax-return leak case turn into a compensation fund? Trump’s lawsuit stemmed from the 2019 disclosure of his tax information by Charles Littlejohn, a former IRS contractor who later pleaded guilty to unlawfully disclosing tax returns. The suit accused the IRS and Treasury Department of failing to protect the records and sought at least $10 billion in damages. By May 18, court filings showed Trump was seeking dismissal while the administration finalized a broader settlement. (bloomberg.com) Bloomberg reported on May 18 that the Justice Department paired that dismissal with a fund worth about $1.8 billion for alleged victims of government “weaponization.” ABC News separately reported the administration was preparing a “Truth and Justice Commission” tied to a $1.776 billion compensation pool. Those reports described the fund as the central consideration in the deal replacing Trump’s damages claim. (cbsnews.com) ### What does the audit addendum do? A May 19 report said the Justice Department expanded the settlement to include a pledge that the IRS would no longer pursue tax claims involving Trump, his family members and his companies. Politico reported that the department said the IRS would stop pursuing any claims it may have over unpaid taxes. Reuters, in a separate account circulated through partner sites, said the government was “forever barred and precluded” from examining or prosecuting current tax issues tied to Trump and related entities. (bloomberg.com) The New York Times reported on May 19 that, as part of the compensation-fund deal, officials also agreed not to pursue pending matters involving Trump’s tax returns. USA Today described the arrangement as barring audits of Trump, his family and businesses. Together, those reports indicate the settlement reached beyond the original leak claim and into Trump’s unresolved tax exposure. (politico.com) ### What did Todd Blanche say about who could get paid? Acting Attorney General Todd Blanche told lawmakers on May 19 that he could not commit to excluding people who assaulted police on January 6, 2021, from seeking money from the new fund. Reuters reported that Blanche, appearing before a Senate subcommittee, also would not rule out payouts to Trump campaign donors. CNBC reported Blanche said “anybody” could apply. (nytimes.com) Blanche’s remarks came in his first congressional testimony since taking the acting role, according to Reuters. His answers drew attention because they suggested the eligibility rules for the fund had not been narrowed to exclude categories of applicants that critics had raised in public. (whbl.com) ### What is the next concrete step? Senate scrutiny began on May 19, when Blanche was questioned on the Justice Department’s proposed 2027 budget and on the new fund during a subcommittee hearing in Washington. Court records already reflect Trump’s move to dismiss the lawsuit, and the next public details are likely to come through additional Justice Department filings, appropriations testimony and any published rules governing who may apply for compensation. (usnews.com)
Key numbers
- Donald Trump on May 18 moved to dismiss his $10 billion IRS lawsuit as the Justice Department created a roughly $1.8 billion compensation fund.
- Todd Blanche told lawmakers on May 19 he could not promise Jan.
- 6 assailants or Trump donors would be excluded from payouts.
- Court filings dismissed the suit, and Senate questioning of Blanche on the fund’s rules began on May 19.
What happens next
- Donald Trump moved on May 18 to drop his $10 billion lawsuit against the Internal Revenue Service over the leak of his tax returns, and the Justice Department said it would create a roughly $1.8 billion “weaponization” fund as part of the settlement.
- A separate Justice Department addendum reported on May 19 bars the IRS from pursuing past audits or pending tax matters involving Trump, his family and his businesses.
- By May 18, court filings showed Trump was seeking dismissal while the administration finalized a broader settlement.
Quick answers
What happened in Trump drops $10bn IRS suit?
Donald Trump on May 18 moved to dismiss his $10 billion IRS lawsuit as the Justice Department created a roughly $1.8 billion compensation fund. Todd Blanche told lawmakers on May 19 he could not promise Jan. 6 assailants or Trump donors would be excluded from payouts. Court filings dismissed the suit, and Senate questioning of Blanche on the fund’s rules began on May 19.
Why does Trump drops $10bn IRS suit matter?
Donald Trump moved on May 18 to drop his $10 billion lawsuit against the Internal Revenue Service over the leak of his tax returns, and the Justice Department said it would create a roughly $1.8 billion “weaponization” fund as part of the settlement. Reuters and other outlets reported that the fund is intended to compensate people who say they were targeted by the federal government during Joe Biden’s presidency. The settlement does not send money directly to Trump, according to Bloomberg’s account of the agreement. A separate Justice Department addendum reported on May 19 bars the IRS from pursuing past audits or pending tax matters involving Trump, his family and his businesses. How did a tax-return leak case turn into a compensation fund? Trump’s lawsuit stemmed from the 2019 disclosure of his tax information by Charles Littlejohn, a former IRS contractor who later pleaded guilty to unlawfully disclosing tax returns. The suit accused the IRS and Treasury Department of failing to protect the records and sought at least $10 billion in damages. By May 18, court filings showed Trump was seeking dismissal while the administration finalized a broader settlement. (bloomberg.com) Bloomberg reported on May 18 that the Justice Department paired that dismissal with a fund worth about $1.8 billion for alleged victims of government “weaponization.” ABC News separately reported the administration was preparing a “Truth and Justice Commission” tied to a $1.776 billion compensation pool. Those reports described the fund as the central consideration in the deal replacing Trump’s damages claim. (cbsnews.com) What does the audit addendum do? A May 19 report said the Justice Department expanded the settlement to include a pledge that the IRS would no longer pursue tax claims involving Trump, his family members and his companies. Politico reported that the department said the IRS would stop pursuing any claims it may have over unpaid taxes. Reuters, in a separate account circulated through partner sites, said the government was “forever barred and precluded” from examining or prosecuting current tax issues tied to Trump and related entities. (bloomberg.com) The New York Times reported on May 19 that, as part of the compensation-fund deal, officials also agreed not to pursue pending matters involving Trump’s tax returns. USA Today described the arrangement as barring audits of Trump, his family and businesses. Together, those reports indicate the settlement reached beyond the original leak claim and into Trump’s unresolved tax exposure. (politico.com) What did Todd Blanche say about who could get paid? Acting Attorney General Todd Blanche told lawmakers on May 19 that he could not commit to excluding people who assaulted police on January 6, 2021, from seeking money from the new fund. Reuters reported that Blanche, appearing before a Senate subcommittee, also would not rule out payouts to Trump campaign donors. CNBC reported Blanche said “anybody” could apply. (nytimes.com) Blanche’s remarks came in his first congressional testimony since taking the acting role, according to Reuters. His answers drew attention because they suggested the eligibility rules for the fund had not been narrowed to exclude categories of applicants that critics had raised in public. (whbl.com) What is the next concrete step? Senate scrutiny began on May 19, when Blanche was questioned on the Justice Department’s proposed 2027 budget and on the new fund during a subcommittee hearing in Washington. Court records already reflect Trump’s move to dismiss the lawsuit, and the next public details are likely to come through additional Justice Department filings, appropriations testimony and any published rules governing who may apply for compensation. (usnews.com)
