On January 29, 2026, President Donald Trump, his sons Donald Jr. and Eric, and the Trump Organization sued the IRS and the Treasury Department seeking $10 billion in damages. The lawsuit faced criticism because the president controls the defendant agencies, raising concerns about arm’s-length negotiations. The case was dismissed with prejudice after the Department of Justice agreed to establish a $1.776 billion “Anti-Weaponization Fund” to compensate victims of lawfare. The agreement also stated the government would not pursue legal action against the Trumps and related entities for matters connected to the lawsuit, including tax-related actions existing before the settlement took effect. Some argued this could limit federal tax audit exposure. The settlement’s structure is linked to the ability to access the government judgment fund through a court settlement.
"But by settling in court, Trump had access to the government judgment fund, a statutory appropriation of federal funds to be used to pay judgments. Shouldn't the judge approve the settlement? There was a settlement agreement between the parties as clearly notated here and here. But the plaintiffs filed a notice of dismissal with the court that has no men"
Read at Above the Law
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