President Donald Trump has withdrawn his $10 billion lawsuit against the Internal Revenue Service over the leak of his tax returns. This move comes amid reports of his administration setting up a fund to compensate some of his allies. The decision was disclosed in a filing in a Florida federal court, where the lawsuit was initially filed last year.
ABC News recently reported that Trump intended to drop the lawsuit as part of a deal involving a $1.7 billion fund. The fund aims to compensate Trump allies who believe they were unjustly investigated and prosecuted. The court filing did not specify the terms of any possible agreement.
The announcement of the fund drew criticism from Democrats, including Rep. Jamie Raskin. He referred to it as a “political grievance fund” that Trump could use to reward his friends. Raskin stated that those with valid grievances should seek legal action through the court system, proving their case with substantial evidence. He expressed disbelief in the idea of Trump using the fund as a form of personal reward distribution.
The beneficiaries of the fund remain unidentified, but its creation supports Trump’s longstanding claims of a biased Justice Department under the Biden administration. He pointed to dismissed charges related to conspiracy to overturn the 2020 election results and keeping classified documents at Mar-a-Lago. Several of Trump’s aides were prosecuted, along with numerous supporters involved in the January 6 Capitol breach.
During Biden’s administration, Attorney General Merrick Garland denied the politicization of his department, insisting that decisions were based on facts and the law. The department also investigated Biden’s handling of classified documents and prosecuted Hunter Biden for separate offenses. Despite this, Trump’s Justice Department has pursued charges against individuals he perceives as adversaries, investigating alleged conspiracies to undermine his political future.
Trump’s lawsuit, filed earlier this year in Florida, claimed that leaked tax records of him and the Trump Organization caused substantial harm, damaging reputations and public standing. The president’s sons, Donald Trump Jr. and Eric Trump, were also plaintiffs.
In 2024, former IRS contractor Charles Edward Littlejohn, associated with Booz Allen Hamilton, received a five-year prison sentence for leaking Trump’s tax information. The leaks were connected to reports by The New York Times and ProPublica, revealing Trump’s minimal tax payments during his presidency.
Signs of a potential settlement appeared in April, when Trump’s lawyers requested a 90-day pause to negotiate resolution terms. This pause aimed to allow both parties to explore resolving the case more efficiently.
In February, when discussing potential damages, Trump suggested donating any proceeds to charity. He considered making substantial charitable donations, claiming nobody would oppose it due to the cause.
Concerns about the Justice Department’s independence in this case were expressed by a group of lawyers writing to the court. Several ethics groups also submitted briefs challenging Trump’s lawsuit.