Trump Settles $10 Billion Lawsuit Against IRS

In a surprising move, President Trump has settled a $10 billion lawsuit against the IRS, accepting an apology instead of cash, along with the creation of a $1.776 trillion fund designed to compensate those affected by federal weapon use.

A senior official indicated that individuals who feel they have been targeted unfairly by the federal government may apply for compensation from the new anti-weaponization fund. This includes people charged in connection with the January 6, 2021, Capitol riot and even Hunter Biden, the president’s son.

“The goal is not to make everyone wealthy because of January 6,” the official explained. “It’s about compensating those who deserve it, restoring some dignity and financial relief for what they’ve experienced—whether it’s legal fees or other losses incurred.”

The settlement means that Trump and his sons, Don Jr. and Eric, along with the Trump Organization, will not receive any compensation from this fund, but they will be given a formal apology.

This agreement does not impact Trump’s other ongoing legal challenges related to the FBI raid on Mar-a-Lago from August 2022 or the investigation into allegations of collusion with Russia during the 2016 campaign.

Upon returning to office in January 2025, Trump pledged to stop the “weaponization” of the government, stating during his inaugural address, “Never again will the great power of the state be weaponized to persecute political opponents. I know something about that.”

The timing is crucial, as the Justice Department faces a deadline soon to justify why the lawsuit should move forward.

Factors influencing compensation claims from the fund will include the strength of the claims, the conduct of the claimants, legal fees incurred, and any relief the claimants have already received.

Hunter Biden, who faced federal tax and gun charges before being pardoned by his father, still has substantial legal fees and his law firm is actively seeking payment.

When asked about the possibility of Hunter filing a lawsuit, the official remarked, “We’re considering it.” “We’ll see if the commissioner feels he deserves compensation.”

This settlement doesn’t stipulate that applicants must be Republicans or specific individuals targeted by an administration. Both people and businesses are eligible to apply.

“We wanted to keep it open because, frankly, the weaponization issue can affect anyone. The president believes the Justice Department was misused, and if Hunter feels this way, he can apply,” the official clarified.

The board overseeing the compensation fund will comprise five members, all appointed by Acting Inspector General Todd Blanche, with one member selected in consultation with legislative leaders. The president has the authority to dismiss board members without cause.

“We’re addressing the various forms of weaponization and aim to have a board that can offer diverse perspectives on rectifying it,” the administration official stated.

As for a potential replacement for Blanche, discussions will take place with House Speaker Mike Johnson and Senate Majority Leader John Thune in the days ahead.

The board has the power to issue apologies, provide financial relief, or request additional information from claimants and relevant agencies.

Approved claims will be subject to Freedom of Information Act laws, federal audits, and must be reported to the Attorney General.

The fund is set to be operational until December 15, 2028, after which any unallocated funds will revert to the federal government.

This isn’t the first time a compensation fund has been established. The Obama administration created a $680 million fund in 2010 to settle a class action lawsuit by Native American farmers, alongside as much as $80 million in farm loan debt forgiveness.

Trump’s lawsuit against the IRS originated on January 29, where he claimed that the government failed to protect the confidentiality of their tax returns, which were leaked to the media.

In a related case, IRS contractor Chaz Littlejohn admitted guilt to fraudulent disclosure and received a five-year prison sentence in January 2024 for leaking tax documents from wealthy Americans who had also pursued legal action against the federal government.