President Trump has filed to dismiss the $10 billion lawsuit he brought against the Internal Revenue Service and the Treasury Department over the leak of his tax returns, according to a court filing.
Hours after the dismissal was announced, the Justice Department said it would establish an “anti-weaponization fund” as part of a settlement tied to the case. The department said the $1.776 billion fund will be used to resolve and pay claims.
Ethics watchdogs and congressional Democrats say they are seeking to intervene in the matter. Trump and the Trump Organization sued the IRS and Treasury in January, demanding $10 billion for the leaks of his tax information that occurred between 2018 and 2020.
Legal experts have widely described the original suit as legally weak. Investigations traced the leak to a federal contractor, not a regular federal employee; that contractor has been prosecuted and is serving prison time. Experts also noted the possibility that statutes of limitations could bar parts of the claim.
The Justice Department recently told the court it had entered negotiations to resolve the dispute — a development that raised questions because a settlement could mean the federal government, led by President Trump, would pay him personally.
U.S. District Judge Kathleen Williams of Miami, who is overseeing the case, flagged a related constitutional concern: Trump is both the sitting president and the named plaintiff. “Although President Trump avers that he is bringing this lawsuit in his personal capacity, he is the sitting president and his named adversaries are entities whose decisions are subject to his direction,” Judge Williams wrote. “Indeed, President Trump’s own remarks about this matter acknowledge the unique dynamic of this litigation. Accordingly, it is unclear to this Court whether the Parties are sufficiently adverse to each other so as to satisfy Article III’s case or controversy requirement.”
There is an established process at the Justice Department for evaluating claims against the federal government; those claims are typically handled by career lawyers and seldom involve high-profile criminal investigations. “Some of them are run-of-the-mill, right? Postal vehicles get into traffic accidents, Veterans Affairs doctors have malpractice claims brought against them, people slip and fall in federal buildings,” said Rupa Bhattacharyya, a former Justice Department lawyer who reviewed such claims. She added that even the most serious cases, including claims tied to cleanup after the Sept. 11 attacks, rarely resulted in payouts above $10 million.
Conservative lawyer Edward Whelan suggested pausing the litigation until Trump leaves office, calling the situation “a glaring conflict of interest” because the president would be effectively on both sides of the claim. Critics argue that the combination of settlement talks, the president as a plaintiff, and the DOJ’s role demands heightened scrutiny and possible judicial or congressional oversight.
