President Trump settled his lawsuit against the IRS on Monday, trading a $10 billion claim for a $1.776 billion fund designed to compensate people who say they were targets of government "weaponization."
The settlement establishes a taxpayer-backed mechanism to reimburse individuals who claim they faced wrongful targeting by the Biden administration. The pool of eligible claimants includes January 6 defendants, according to the fund's structure.
Under the agreement, Trump, his sons, and the Trump organization will receive a formal written apology from the government but no direct payment. The case was dismissed "with prejudice," a legal designation that bars Trump from refiling the lawsuit.
The dispute originated after a former IRS contractor leaked Trump's confidential tax returns to The New York Times and ProPublica during his first term. That contractor pleaded guilty and received a federal prison sentence. Trump's legal team argued the breach violated his privacy and demanded compensation from the agency.
The settlement resolves an unusual circumstance in which the sitting president demanded payment from federal agencies now under his own authority. Neither Monday's court filing nor available statements clarified whether other agencies involved in the original dispute formally agreed to the settlement terms alongside the IRS.
News outlets had previously reported that Trump was exploring an $1.8 billion fund as part of settlement negotiations. The fund's creation marks a significant shift from litigation, offering a pathway to resolve the dispute while establishing a new avenue for claims related to alleged government misconduct during the previous administration.
Author James Rodriguez: "This deal transforms a presidential grudge into a government compensation program, which is either creative justice or an expensive way to settle scores depending on your view."
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