Trump creates $1.8bn compensation fund

President Donald Trump agreed on May 18 to drop a $10 billion lawsuit against the Internal Revenue Service in exchange for a Justice Department settlement that created a nearly $1.8 billion compensation fund for people the administration says were targeted by Biden-era “weaponization.” The fund, announced by Acting Attorney General Todd Blanche, is valued at $1.776 billion and is designed to handle claims from people seeking compensation or apologies. (msn.com) The settlement also went beyond the original tax-return leak dispute by shielding Trump, his family members and related business entities from certain IRS claims tied to past tax filings. (cnbc.com) Within a day of the announcement, lawyers, political operatives and potential claimants were already positioning for payouts, while legal and political backlash accelerated. (msn.com) ### How did Trump’s IRS lawsuit turn into a compensation fund? Trump sued the IRS, Treasury Department and related parties over the leak of his tax return information, seeking $10 billion in damages. On May 18, the administration said Trump would dismiss that case and, instead of receiving direct damages, the Justice Department would establish the $1.776 billion “anti-weaponization” fund. The Justice Department said the fund would compensate people who claimed they had been harmed by political “weaponization” or “lawfare.” Time reported that Trump, Donald Trump Jr., Eric Trump and the Trump Organization were also to receive a formal apology under the agreement, though not direct cash damages from the settlement itself. (msn.com) ### What did the settlement say about Trump’s taxes? CNBC reported on May 19 that the settlement barred the federal government from prosecuting or pursuing claims that could have been brought by the IRS involving tax returns filed before the agreement took effect. The protection extends to Trump, his family members, the Trump Organization and related trusts, affiliates and subsidiaries, according to the settlement document cited by CNBC. (wbur.org) Politico reported a day later that the Justice Department expanded the arrangement to include a pledge that the IRS would no longer pursue claims it may have against Trump, his family members and his companies over unpaid taxes. That provision turned a case about leaked tax records into a broader tax-enforcement settlement. (time.com) ### Who is expected to seek money from the fund? CBS News reported on May 19 that attorneys and communications professionals were already moving to line up clients for claims, and that people in Trump’s orbit expected January 6 defendants to apply. One Republican lawyer close to the administration told CBS that “a lot of people in MAGA world are already counting their money,” while also expecting court challenges. (cnbc.com) Acting Attorney General Blanche also faced questions from senators about whether pardoned January 6 offenders could receive payouts. Coverage of that exchange said Blanche did not rule out that possibility. (politico.com) ### What legal and political resistance has emerged? Two officers injured in the January 6 attack sued to block the fund, according to reports surfaced on May 20, arguing that the program could unlawfully reward people convicted in the Capitol riot. That challenge appeared within days of the fund’s creation. Brian Morrissey, the Treasury Department’s general counsel, resigned hours after the fund was announced, Treasury confirmed in reports published May 19. (cbsnews.com) Politico and other outlets identified Morrissey as the department’s top legal officer and said his departure came amid the fallout from the settlement. (msn.com) ### What happens next? Court filings are likely to determine how far the fund can go and who can qualify for compensation. Senators are also pressing Blanche and other administration officials for details about eligibility, legal authority and the handling of tax-enforcement provisions in the settlement. As of May 20, the immediate next steps were the emerging lawsuits over the fund and the administration’s rollout of the claims process for prospective applicants. (msn.com) (politico.com)