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DOJ sets up $1.8b fund after Trump withdraws IRS lawsuit

May 19, 2026 3:06 pm

source: reuters

U.S. President Donald Trump’s administration on Monday created a nearly $1.8 billion fund to compensate victims of political “weaponization” to settle a ​lawsuit Trump had filed against his own government over the alleged mishandling of his tax records.

The agreement resolves an unprecedented lawsuit filed by Trump, in which he sought $10 billion ‌from the Internal Revenue Service, arguing it should have done more to prevent a former contractor from leaking his tax returns to the media.

Trump will receive an apology but no financial payment.

Instead, the Justice Department will set up a pool of money controlled by his allies that can dole out payments to those who claim to have suffered “weaponization or lawfare” by the U.S. government. Those terms have frequently been used by Trump and his allies ​to describe the criminal cases against them, including those arising from the attack on the U.S. Capitol on January 6, 2021.

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Trump’s lawsuit, and the resulting settlement, has been widely ​criticized as an attempt to direct taxpayer money to his own purposes.

“This case is nothing but a racket designed to take $1.7 billion of taxpayer ⁠dollars out of the Treasury and pour it into a huge slush fund,” Representative Jamie Raskin of Maryland, the top Democrat on the House Judiciary Committee, said in a statement.