Justice Department grants $1.8B fund

The Justice Department’s settlement with President Donald Trump over the leak of his tax returns did more than end a $10 billion lawsuit. By May 20, 2026, the arrangement had grown to include a $1.776 billion “Anti-Weaponization Fund,” a formal apology to Trump and his co-plaintiffs, and a separate addendum that says the IRS is barred from pursuing examinations tied to tax returns filed before the settlement date. Democrats, ethics watchdogs and former tax officials said the package broke with normal government practice, while the administration said it was using lawful settlement tools to address claims of political targeting. ### How did a tax-return leak case turn into a $1.776 billion federal fund? On May 18, 2026, Trump moved to dismiss his lawsuit against the IRS, and the Justice Department announced the creation of a $1.776 billion fund to compensate people who say they were harmed by “weaponization and lawfare.” The case had been filed in January against the IRS and Treasury Department over the disclosure of Trump’s tax information, which had been attributed to former IRS contractor Charles Littlejohn. (politico.com) The Justice Department said the money would come from the federal Judgment Fund, a permanent Treasury appropriation used to pay some settlements and judgments against the government. The department said the new program could issue monetary awards or formal apologies, and that claims processing would end by Dec. 15, 2028. ### What did the tax-audit addendum actually say? (nbcnews.com) A one-page addendum posted by the Justice Department on May 19 said the IRS is “forever barred and precluded” from pursuing examinations of Trump, related individuals, trusts and businesses for returns filed before the settlement took effect on May 18. Acting Attorney General Todd Blanche signed that document, according to Politico. (nbcnews.com) The original nine-page settlement released on May 18 did not mention Trump’s tax audits. Politico reported that the later addendum did not bear the signature of any IRS representative or current Trump lawyer, and the Justice Department said the waiver covered claims that “were or could have been brought” and applied to existing audits, not future ones. ### Why are critics calling it unusual? (politico.com) Andrew Weissmann, a former federal prosecutor interviewed by NPR, called the settlement unprecedented because it gave Trump and his family immunity from tax audits while creating a large compensation fund for alleged victims of government “weaponization.” John Koskinen, a former IRS commissioner, told Politico the audit waiver set a “terrible precedent.” (politico.com) U.S. District Judge Kathleen Williams, who dismissed the IRS case on May 18, wrote that the government had not filed documents showing the settlement was appropriate despite questions about whether an actual case or controversy still existed. NPR also reported that legal experts had described Trump’s underlying lawsuit as weak and had raised statute-of-limitations concerns because the disclosures occurred between 2018 and 2020. (klcc.org) The New York Times reported on May 20 that no president had used the federal government to advance his own and his family’s interests as openly or expansively as Trump had in this arrangement. ### Who could get money from the new fund? NBC News reported that the fund could give pardoned Jan. 6 defendants a mechanism to seek taxpayer-backed compensation, and Blanche declined in Senate testimony to rule out payments to people who attacked police officers. (ideastream.org) The department said there would be no partisan requirements for filing a claim. (nytimes.com) The commission that will run the fund has not yet been named. According to NBC News and Time, the attorney general will appoint five members, including one chosen in consultation with congressional leadership, and Trump would retain removal power over commissioners. ### What is Congress doing now? On May 20, House Judiciary Committee Democrats tried to subpoena Blanche, Associate Attorney General Stanley Woodward, Treasury Secretary Scott Bessent, IRS CEO Frank Bisignano and former Treasury general counsel Brian Morrissey. (nbcnews.com) Republicans on the committee voted to block the effort. Jamie Raskin, the panel’s top Democrat, said lawmakers had “many questions” about the transaction. (nbcnews.com) Republicans, including Chair Jim Jordan, pointed to settlements reached during the Biden administration as they pushed back on Democratic criticism. ### What could test the settlement next? May 21 reporting from Jen Psaki’s program on MS NOW said video may show Trump knew earlier than claimed about the tax-information leak at the center of the lawsuit, a point Rep. (politico.com) Dan Goldman said could affect the timeliness of the case. That account aligns with earlier reporting that statute-of-limitations questions already surrounded the suit. The next concrete milestones are administrative and political. The Justice Department still has to name the five-member commission that will oversee claims, and Congress can continue seeking testimony from Blanche, Woodward, Bessent and Bisignano as scrutiny of the settlement continues. (politico.com) (msn.com)