DOJ rolls out nearly $1.8B of your tax dollars to.... “victims of lawfare and weaponization.”

DOJ rolls out nearly $1.8B ‘anti-weaponization fund’ as part of Trump’s IRS settlement

The move comes after Trump, his sons and family business sued the IRS for $10 billion for failing to properly oversee a contractor who leaked the tax returns of the president.

By Josh Gerstein and Danny Nguyen

President Donald Trump and the Justice Department have reached a settlement of a $10 billion lawsuit he filed against the IRS over the leaking of his tax returns, ending a case that both perplexed and outraged critics as the president sought to sue the government he runs.

Under the deal announced Monday, the Justice Department is setting up a $1.776 billion “Anti-Weaponization Fund” to pay claims to people acting Attorney General Todd Blanche called “victims of lawfare and weaponization.”

Blanche did not elaborate on who will be eligible for the compensation, but some people who were convicted of crimes in connection with the Jan. 6, 2021 Capitol riot have already sued the government. The fund, to be overseen by a five-person commission, will process claims through mid-December 2028 — about a month before Trump’s term is set to end.

“The machinery of government should never be weaponized against any American, and it is this Department’s intention to make right the wrongs that were previously done while ensuring this never happens again,” Blanche said in a statement.

Miami-based U.S. District Judge Kathleen Williams closed the case in an order Monday evening.

Under the settlement, Trump also agreed to drop damages claims he filed against the federal government over investigations into his 2016 presidential campaign’s ties to Russia and the court-approved FBI raid on Mar-a-Lago in 2022 as part of a probe into the handling of classified documents, a DOJ statement said.

Trump and his family members “will receive a formal apology but no monetary payment or damages of any kind,” the statement said.

At the White House Monday afternoon, Trump said that he knows “very little about it,” and that “I wasn’t involved in the creation of it.”

While reports prior to the deal said it could settle pending audits and tax disputes involving Trump and his companies and could even limit the IRS’s ability to contest Trump’s future returns, the text of the settlement released by the DOJ Monday afternoon did not include such provisions.

“President Trump, his family, supporters, and countless other America First Patriots were illegally targeted by the Democrat-lead [sic] law enforcement agencies, including the Department of Justice, and the IRS,” a spokesperson for Trump’s legal team said in a statement.

“Trump was also the victim of illegal harassment and invasions of privacy” during the Russian influence probe and the Mar-a-Lago search, the statement continued. “Trump is entering into this settlement squarely for the benefit of the American people, and he will continue his fight to hold those who wrong America and Americans accountable.”

Trump moves to drop the case

In accordance with the settlement, Trump’s attorneys filed a notice Monday with a federal court dismissing the lawsuit he filed in January.

The developments Monday came after Williams, who was overseeing the case, raised doubts about whether the litigation could proceed since Trump was effectively both the plaintiff and defendant.

Williams had ordered both sides to file formal legal arguments on that issue by Wednesday and took the unusual step of appointing outside attorneys to advise the court on the legal questions involved. She’d set a hearing on the matter for next week, but Trump’s new filing contends that the case is now over since he has the right to dismiss it at an early stage without judicial approval.

Williams appeared to accept that, issuing a three-page order that closed the case and scuttled next week’s hearing, but also seemed to swipe at the Justice Department’s handling of the matter.

“Defendants—federal agencies represented by the Department of Justice, which has an independent obligation to uphold the ‘public’s strong interest in knowing about the conduct of its Government and expenditure of its resources’ and the ‘fair administration of justice…’—neither submitted any settlement documents nor filed any documents ensuring that settlement was appropriate where there was an outstanding question as to whether an actual case or controversy existed,” the judge wrote in her order, which emerged just after DOJ released the full text of the deal.

The settlement comes four months after Trump, his sons and family business sued the IRS for $10 billion for failing to properly oversee a contractor who leaked the tax returns of the president and other wealthy individuals to the media seven years ago.

The contractor, Charles Littlejohn, pleaded guilty in 2023 to leaking Trump’s returns along with the returns of thousands of other wealthy Americans. A federal judge in Washington sentenced him to five years in prison, the maximum he could receive under the plea deal he reached with prosecutors. Littlejohn has appealed his sentence, arguing it was unduly harsh.

Critics skeptical from the outset

Trump’s civil lawsuit immediately drew criticism from the tax and legal world.

“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,” Williams, an Obama appointee, wrote in an order last month. “It is unclear to this Court whether the Parties are sufficiently adverse to each other so as to satisfy [the Constitution’s] case or controversy requirement.”

Nina Olson, a former national taxpayer advocate, said the Trump family’s move to dismiss the case was made easier because the president effectively oversees both parties in the case.

“One needs look no further than the fact the Justice Department has not appointed any attorney to prosecute this case on behalf of the US taxpayer, much less respond,” said Olson, who now leads the nonprofit Center for Taxpayer Rights. “And now that failure is used to justify withdrawal of the case. We will see what next occurs and how US taxpayers will be further harmed.”

Shortly after suing in January, Trump acknowledged that it was unusual to be on both sides of a lawsuit.

“It’s very interesting,” Trump told reporters on Air Force One. ”We’re thinking about doing something for charity, where I’ll give money to charity.”

Last month, the president’s attorneys said they wanted to pause the lawsuit for 90 days to work out a deal with the Justice Department “to avoid protracted litigation.”

In recent weeks, reports emerged about a potential settlement in the case as part of a broader attempt by the Justice Department to resolve a variety of legal claims Trump and his allies have made against the federal government.

The settlement agreement said if no deal was reached, Trump planned to try to turn his case against the IRS into a class action on behalf of others whose tax returns were illegally disclosed.

Democrats react

House Democrats, through their litigation task force, urged Williams to block immediately any prospective settlement deals that could “reward allies, including the nearly 1,600 defendants convicted or charged in connection with the January 6th attack on the Capitol,” according to a legal filing submitted after Trump’s legal team filed their voluntary dismissal notice.

“It’s official: Trump is moving to make the Jan. 6 cop-beaters, rioters and insurrectionists MILLIONAIRES with our tax dollars,” Rep. Jamie Raskin (D-Md.), the House Judiciary Committee’s ranking member, said in a statement after the announcement of DOJ’s fund.

DOJ has broad authority to use funds to settle claims and lawsuits against the federal government.

Democratic lawmakers Monday were quick to blast the dismissal of Trump’s case against the IRS and details of the settlement agreement.

“Regardless of whether Trump filed this lawsuit with a personal payday or a slush fund in mind, he deserves no credit for dropping it, and even by his standards the move he’s trying to get away with now is a stunning act of corruption,” Sen. Ron Wyden of Oregon, ranking member of the Senate Finance Committee, said in a statement. He added that Trump is seeking a “slush fund for right-wing political violence and subversion, and if he follows through, it will be the most brazen theft and abuse of taxpayer dollars by any president in American history.”

Sen. Elizabeth Warren (D-Mass.), another member of the Finance panel, wrote on X that the compensation fund is “corruption on steroids.”