Trump creates $1.7bn compensation fund

The Justice Department on May 18 created a $1.776 billion Anti-Weaponization Fund as part of a settlement of President Donald Trump’s lawsuit against the Internal Revenue Service over the leak of his tax returns. The department said the fund would hear claims from people it describes as victims of “weaponization and lawfare,” while Trump, Donald Trump Jr., Eric Trump and the Trump Organization would receive formal apologies but no direct cash payment. A one-page addendum posted May 19 went further, saying the IRS is “forever barred and precluded” from pursuing certain claims tied to tax returns filed before the settlement took effect. Critics, including Democratic lawmakers and a former IRS commissioner, said the arrangement crossed lines between presidential power and ordinary legal process. ### How was the fund created? The Justice Department said the fund was created through the settlement of *President Donald J. Trump v. Internal Revenue Service*, the case Trump and his co-plaintiffs filed in federal court in South Florida after the leak of their tax returns. The department said the plaintiffs agreed to dismiss that case with prejudice and to withdraw two related administrative claims involving the Mar-a-Lago search and what DOJ called the “Russia-collusion hoax.” (justice.gov) Acting Attorney General Todd Blanche said in the department’s release that “the machinery of government should never be weaponized against any American.” The DOJ said the money will come from the federal Judgment Fund, a permanent appropriation used to pay certain settlements and judgments, and that any unused money will revert to the government. ### Who can get paid, and who decides? (justice.gov) The DOJ said the fund is meant to provide a process for people who say they were targeted for improper political, personal or ideological reasons. The department said filing a claim is voluntary, there are no partisan requirements, and the fund can grant either monetary relief or formal apologies. Reporting by Time and other outlets said the claims process will be overseen by a five-member commission appointed by the attorney general, with one member selected in consultation with congressional leadership. (justice.gov) Trump told reporters on May 18 that he was not involved in creating the fund, according to Reuters and other outlets. ### Why is the number reported as $1.7 billion in some places and $1.8 billion in others? (justice.gov) The DOJ’s own figure is $1.776 billion. News organizations have rounded that number differently, with some describing it as $1.7 billion and others as nearly $1.8 billion. ABC News reported before the final announcement that officials were discussing a $1,776,000,000 fund and said the number was intended as a reference to the nation’s founding. (time.com) ABC also reported that DOJ lawyers had considered ways to compensate Trump directly before that approach was dropped in favor of the fund, as U.S. District Judge Kathleen Williams raised questions about whether the parties in the IRS case were sufficiently adverse. ### What changed with the IRS on May 19? A May 19 addendum signed by Blanche said the IRS is barred from pursuing “any and all claims” that could have been brought based on tax returns filed before the settlement date. (justice.gov) Politico reported the document was broader than the original nine-page settlement released a day earlier and said it appeared to end Trump’s long-running disputes with the IRS over past returns. (abcnews.com) CNBC reported the protection extends beyond Trump to family members, the Trump Organization and related trusts, affiliates and subsidiaries. The Justice Department said the waiver applied to existing matters, not future ones. ### Who is objecting, and on what grounds? Sen. Ron Wyden, the top Democrat on the Senate Finance Committee, said the provision violated federal law barring executive branch interference in IRS audits. (politico.com) John Koskinen, the former IRS commissioner, called the expanded settlement a “terrible precedent” in comments reported by Politico. At a Senate hearing on May 19, Blanche defended the fund and did not rule out the possibility that some Jan. 6 defendants could seek compensation, according to CNBC and other outlets. (politico.com) That prospect has sharpened criticism from Democrats, who have described the arrangement as self-dealing and a vehicle for rewarding Trump allies. ### What happens next? The DOJ said the fund must send quarterly reports to the attorney general identifying who received relief and what form it took. (cnbc.com) The department also said the fund can be audited at the attorney general’s direction and must stop processing claims no later than December 1, 2028. Any further court scrutiny is likely to center on the settlement paperwork already filed and the separate addendum posted on May 19. (cnbc.com) The next public markers are likely to be the fund’s first quarterly disclosures and any additional litigation or congressional challenges to the IRS waiver. (justice.gov)