President Donald Trump is moving to voluntarily dismiss a $10 billion lawsuit against the IRS that legal experts had called “unprecedented,” according to a Monday court filing.
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The president’s two elder sons, Donald Trump Jr. and Eric Trump, as well as the Trump Organization, were the other plaintiffs in the case and they too are part of the move to drop the lawsuit
The filing came shortly after ABC News reported that Trump was expected to drop the suit in exchange for the creation of a $1.7 billion fund made up of taxpayer dollars that would be used to compensate the president’s allies who have argued they were wrongly targeted by previous administrations, including those charged in the Jan. 6, 2021 riot at the Capitol.
The arrangement would have little oversight; commissioners named to disperse the money would not have to publicly say why they have awarded money to certain people, ABC reported, according to sources familiar with the matter.
The final terms had not yet been announced, and any fund would face significant legal hurdles. NBC News has not independently confirmed the report, and a Justice Department spokesperson did not respond to a request for comment. There was no mention of the fund in the court documents Monday.
The White House referred questions about the filing to the DOJ. Representatives for the Treasury Department, the IRS and Trump’s legal team did not immediately respond to a request for comment.
Trump, his sons and the Trump Organization filed the lawsuit in January, alleging that the IRS and the Treasury Department failed to prevent a former IRS employee from leaking their tax returns.
Last month, the judge overseeing the case had questioned whether there was an actual controversy for the court to address, given Trump’s control over the Justice Department.
The Trump administration was facing a Wednesday deadline to explain “whether a case or controversy exists,” and outside legal experts had told U.S. District Judge Kathleen M. Williams that it could be “useful” for the court to look into whether the attorneys representing the government were “insulated” from the president.
“This case is unprecedented: A sitting president seeks monetary damages for alleged harm to his personal interests from an executive agency that he controls. That presents significant Article III subject matter jurisdiction concerns,” the experts wrote.
“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,” they continued.
In Monday’s filing, the president’s personal lawyers argued that the court did not have to weigh in because they were voluntarily dismissing the case and the administration never replied to the suit.