President Donald Trump is reportedly set to drop his $10 billion lawsuit against the IRS in exchange for the government paying out $1.7 billion to everyone wrongly targeted by the Biden administration.
The money would be paid out through the creation of a compensation fund that would be managed by a commission.
The commission would have the “authority to hand out approximately $1.7 billion in taxpayer funds to settle claims brought by anyone who alleges they were harmed by the Biden administration’s ‘weaponization’ of the legal system,” according to ABC News.
Potential recipients would include the Jan. 6 rioters.
Democrats are NOT happy with this “MAGA slush fund,” as some have called it:
An insane level of corruption—even for Trump.
A $1.7 BILLION slush fund for Trump’s hand-picked stooges to hand money to January 6th insurrectionists and his political allies.
Here’s the President’s priority as Americans sell their plasma to afford gas and groceries: https://t.co/wahV5OPEAj
— Elizabeth Warren (@SenWarren) May 15, 2026
The $1.7 billion in funds would reportedly be drawn from the Treasury Department’s Judgment Fund, which is used to pay court judgments and settlements.
The settlement agreement being prepared also calls for the IRS to publicly apologize to the president.
As previously reported, Trump and his sons sued the feds in January because of the 2019 leak of his tax returns. His lawyers told Politico at the time that the IRS had “a duty to safeguard and protect” the president’s tax returns.
The leak of the president’s tax returns caused “reputational and financial harm, public embarrassment, unfairly tarnished their [the president and his sons’] business reputations, portrayed them in a false light, and negatively affected President Trump,” they added.
The leaker was eventually identified as former IRS contractor Charles Littlejohn, who has since pleaded guilty to unauthorized disclosures of tax returns and was sentenced in 2024 to five years behind bars. He’d been contracted through Booz Allen Hamilton.
NEW:
The US Treasury @USTreasury has canceled contracts with Booz Allen Hamilton @BoozAllen
“Between 2018 and 2020, Charles Edward Littlejohn — an employee of Booz Allen Hamilton — stole and leaked the confidential tax returns and return information of hundreds of thousands of… pic.twitter.com/RsfY2iU1nY
— Laura Loomer (@LauraLoomer) January 26, 2026
In a statement to ABC News, the president’s legal team fiercely defended the current settlement proposal.
“The IRS wrongly allowed a rogue, politically-motivated employee to leak private and confidential information about President Trump, his family, and the Trump Organization to the New York Times, ProPublica and other left-wing news outlets, which was then illegally released to millions of people,” they said. “President Trump continues to hold those who wrong America and Americans accountable.”
As noted earlier, Democrats are livid, including House Judiciary Committee ranking member Jamie Raskin.
“Donald Trump is orchestrating a $1,700,000,000 fraud on the American taxpayer to line the pockets of his MAGA political allies, another installment in his ongoing effort to turn the federal government into a personal cash machine for his unpopular extremist movement,” Raskin said in a ridiculously lengthy statement.
“This is a massive and unprecedented presidential plunder of the American people. Worse still, this is only the beginning—a declaration that the prior payouts were just a down payment, and that he now intends to earmark billions more in taxpayer dollars for his political allies, sycophants and private militia of unemployed insurrectionists,” the unhinged Democrat added.
BREAKING: RM @RepRaskin issues statement on bombshell report that Trump plans to drop his $10 billion lawsuit against the IRS in exchange for the creation of a $1.7 BILLION slush fund to issue taxpayer-funded payouts to MAGA allies: https://t.co/meYN1B9NTG
— House Judiciary Dems (@HouseJudiciary) May 15, 2026
Link: https://t.co/4IRc5PY0AU
— House Judiciary Dems (@HouseJudiciary) May 15, 2026
The president is also seeking $230 million from the feds over the Russian collusion delusion hoax and conspiracy theory, not to mention the feds’ raid of his Mar-a-Lago estate. However, this particular complaint isn’t tied to a lawsuit.
“Trump did not sue the DOJ, but filed two complaints via an administrative claims process in which members of the president’s administration will determine whether to pay the amount the president is seeking,” according to Mediaite.
Writers and editors can be contacted at [email protected] with feedback, tips, or corrections.
V. Saxena is a staff writer with a decade of experience as a professional writer, and a lifetime of experience as an avid news junkie. He holds a degree in computer technology from Purdue University. Saxena also contributes to BizPac Review.
Comment
We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the ∨ icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.