Trump drops IRS lawsuit, $1.8bn fund

President Donald Trump dropped his lawsuit against the Internal Revenue Service on May 19, ending a case he filed in January over the leak of his tax returns and allowing a settlement to take effect. The agreement creates a $1.776 billion fund for people Trump says were harmed by government “weaponization,” according to the settlement described by NPR and documents later reported by the Associated Press and Politico. A separate addendum posted by the Justice Department on Tuesday goes further than the original settlement released a day earlier, saying the government will permanently abandon certain tax claims and examinations involving Trump, his family and related entities. Democrats, former IRS officials and ethics critics said the arrangement was opaque and potentially improper. ### How did a tax-return leak case turn into a $1.8 billion settlement fund? Trump sued the IRS and the Treasury Department in January, seeking $10 billion over the disclosure of his returns after a government contractor shared tax information with news organizations, according to NPR and CNBC. The lawsuit was brought by Trump, his two eldest sons and the Trump Organization in federal court in South Florida. (iowapublicradio.org) The settlement announced this week replaces that damages demand with what the government calls an “Anti-Weaponization Fund” of $1.776 billion. Acting Attorney General Todd Blanche said the fund would create “a lawful process for victims of lawfare and weaponization to be heard and seek redress,” according to the Associated Press report carried by the Review-Journal. (iowapublicradio.org) ### What changed in the addendum the Justice Department posted Tuesday? A one-page addendum posted on the Justice Department website on May 19 says the IRS is “forever barred and precluded” from pursuing certain examinations and claims involving Trump, related individuals, trusts and businesses, Politico reported. The waiver covers tax returns filed before the settlement’s effective date, which was Monday, according to that report. (reviewjournal.com) The Associated Press report said the government would permanently drop tax claims against Trump and that the document also bars examination or prosecution tied to current tax examinations involving Trump, his sons and the Trump Organization. The Justice Department told reporters the settlement refers only to existing audits, not future examinations. (politico.com) ### Who signed the documents, and why are critics focused on that? Acting Attorney General Todd Blanche signed the addendum dated Tuesday, Politico reported. The original nine-page settlement released Monday was signed by Associate Attorney General Stanley Woodward, IRS CEO Frank Bisignano and Trump lawyer Daniel Epstein, but not Blanche, according to the same report. (reviewjournal.com) Politico reported that the addendum did not bear the signature of any IRS representative or any current Trump lawyer. The Justice Department said only that, “as is customary in settlements, both sides have executed waivers of a variety of claims that were or could have been brought.” ### What are Democrats and former IRS officials saying? (politico.com) Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, said on May 15 that a proposed settlement of this kind would amount to a taxpayer-funded “slush fund.” Wyden called the lawsuit “a shakedown of the American people,” according to CNBC. John Koskinen, the former IRS commissioner, called the expanded settlement a “terrible precedent” in comments reported by Politico. (politico.com) The Associated Press said Democrats and government watchdogs criticized the arrangement as “corrupt” and unconstitutional. ### Why was the court schedule important? U.S. District Judge Kathleen Williams had ordered briefing by May 20 on whether the case could proceed at all, given that Trump was suing agencies whose decisions are subject to presidential direction, CNBC reported. (cnbc.com) That deadline loomed over settlement talks reported by ABC News, CNBC and others before Trump withdrew the case. (politico.com) The next public marker is likely to be any additional court filing in the Southern District of Florida or any further Justice Department explanation of the addendum signed by Blanche. As of May 19, the key documents were the original settlement released Monday and the separate addendum posted Tuesday. (reviewjournal.com) (cnbc.com)