Trump IRS suit may trigger $1.7 billion compensation fund amid settlement push

Trump IRS suit settlement talks intensify

US officials are weighing a ↑ $1.7 billion federal compensation fund to resolve the Trump IRS suit over the 2019 tax‑return leak. The deadline for the $10 billion claim looms next week, and insiders say the Treasury could also drop pending audits of the president, his family and related businesses.

Any fund would be open to claimants regardless of party, but the mechanics of disbursement remain in flux. Critics warn that even a neutral‑sounding pool could appear as taxpayer money being used to settle a personal political grievance, echoing accusations that the Biden administration pandemic response was weaponized against conservatives.

“It’s another cash‑machine for the president at the public’s expense,” said Virginia Canter, ethics counsel at the Democracy Defenders Fund.

Past payouts provide a template: two 2016‑probe plaintiffs received $1.25 million each, and hundreds of Jan. 6 defendants are pursuing damages. A former White House lawyer is suing for privacy breaches, while House Democrats probe a $4 million payment to FBI staff alleging retaliation.

Legal scholars note the unusual circumstance of a sitting president suing his own government. A Florida judge has asked for briefs on jurisdiction, citing the Constitution’s emoluments clause, which bars a president from receiving profit from the federal treasury.

For context, the IRS breach stemmed from former contractor Charles Littlejohn’s guilty plea in 2023; he stole records of wealthy Americans, including Trump, and was sentenced to five years.

Separate claims linger over the 2016 election interference probe and a post‑office‑term classified‑information investigation, according to Reuters. The Justice Department declined comment, while the IRS did not respond.

Words by: Eleanor Cross

Chief Washington Correspondent