The White House announced on Monday that a settlement has been reached between the US Justice Department and the Internal Revenue Agency (IRS) over President Donald Trump’s lawsuit in which he sought $10 billion (€8.5 billion) from the tax agency over the leak of his tax returns.
Trump, along with his adult sons Donald Trump Jr. and Eric Trump and their business group, the Trump Organization, sued the IRS in January, accusing the agency of not doing enough to stop a former contractor from leaking his tax information to media outlets.
An IRS contractor pleaded guilty to leaking tax returns in 2023 and was sentenced to five years in prison.
Trump administration sued itself
Although the leak occurred during his first term, Trump filed a lawsuit against the IRS after being sworn in for a second term, effectively suing the agency he oversees.
Under the settlement, the Trump administration agreed to drop the $10 billion lawsuit in exchange for the creation of a $1.76 billion “anti-weapon fund” that would be used by people who were victims of “law enforcement” and prosecution under former President Joe Biden’s administration.
“The machinery of government should never be weaponized against any American, and this Department intends to right the mistakes made before and ensure they never happen again,” Justice Department Acting Secretary Todd Blanche said in a statement.
Critics of the IRS lawsuit and resulting settlement said the move was an attempt to direct taxpayer money to Trump and his allies.
What’s in Basti?
Trump is expected to get an apology from the IRS over the tax return leak, but he will not receive direct financial compensation.
Under the agreement, Blanch is instructed to appoint four of the five members of a commission that will decide the merits of claims submitted to the fund.
So far, the Justice Department has not said how it will determine who receives the payments, saying only that the funds can be used by people who believe they were treated unfairly by the Biden administration.
Democrats condemn ‘absolute corruption’
Congressional Democrats sharply criticized both the IRS lawsuit and the Justice Department’s decision to settle and establish the fund.
Representative Jamie Raskin of Maryland, the top Democrat on the House Judiciary Committee, said, “This case is nothing but a racket designed to siphon $1.7 billion of taxpayer money out of the treasury and into a giant slush fund.”
Representative Alexandria Ocasio-Cortez of New York called the events “complete corruption”.
Democratic Senator Chris Van Hollen accused Trump of dropping a “sham lawsuit” to create funds to “pay off his political allies.”
Edited by: Louis Olofse