President Donald Trump is abandoning a $10 billion lawsuit against the IRS just as a federal judge was about to demand answers on a central legal problem: how a sitting president can sue an agency he controls.
The voluntary dismissal, filed Monday, removes Trump, his sons Donald Jr. and Eric, and the Trump Organization from the case. The lawsuit had challenged the IRS and Treasury Department over a former employee's leak of the Trump family's tax records. Trump filed the suit in January.
The timing is notable. U.S. District Judge Kathleen M. Williams had set a Wednesday deadline for Trump's legal team to explain whether the case involved an actual legal dispute that courts could address. That question had been gnawing at the judge throughout the proceedings.
Legal experts had warned the court that the lawsuit raised extraordinary constitutional problems. In a filing, outside attorneys argued that a president suing his own executive agencies for personal damages created what they called "unprecedented" Article III jurisdiction concerns. They questioned whether the Justice Department could fairly represent the government's interests when the president controlled the department and had a personal stake in the outcome.
"The Court might ask why DOJ's approach to litigating this case appears to depart from its approach in similar cases, as well as what steps Defendants are taking to ensure that settlement discussions are conducted at arm's length and without risk of collusion," the experts wrote to the court.
The judge had also signaled openness to examining whether government attorneys were truly insulated from presidential pressure, creating a potential line of questioning Trump's team wanted to avoid.
Trump's lawyers argued in Monday's filing that the court had no need to reach these questions because the plaintiffs were simply dropping the suit. The administration never formally responded to the lawsuit, they noted, so there was nothing left to litigate.
Representatives from Trump's legal team, the Justice Department, the White House, Treasury, and the IRS did not provide statements on the decision.
The lawsuit had sought damages over the 2021 leak of Trump's tax information to news organizations, claiming the agencies failed in their duty to protect the records. The case quickly became a test of whether courts would entertain claims where the plaintiff and the defendant answer to the same boss.
Author Sarah Mitchell: "Trump chose the exit ramp before the judge could formally declare the case a constitutional nightmare. Smart lawyering or admission of weakness, depending on your view."
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