Trump Drops $10B IRS Lawsuit As Democrats Freak Out Over $1.7B Settlement Fund – RedState
UPDATE 05/18/26 12:05 p.m. ET: Minutes after this article was published, new developments were announced — the settlement fund was accepted:
WASHINGTON — The Trump administration announced Monday the creation of a $1.7 billion fund to compensate allies of the Republican president who believe they have been mistreated by the Biden administration’s Justice Department.
The “Anti-Arms Fund” was announced by the Justice Department as part of a deal to address President Donald Trump’s problem. lawsuit against the Internal Revenue Service because of the leak of his tax returns.
Acting Attorney General Todd Blanche said when announcing the fund in a statement that it was a “legal process for victims of legal and gun battles to be heard and seek redress.”
Original story:
During Donald Trump’s first presidential term, the deep state came out in force and did everything in its power to destroy it. He faced two bogus impeachment attempts by Democrats, a protracted effort to prove him guilty of collusion with Russia, and a seemingly endless cycle of anonymous sources telling mainstream media that he was secretly an enemy of the state.
On several occasions, pages of his tax returns were illegally leaked, and in 2020, The New York Times published an investigation based on anonymous sources covering six years of his tax data. He sued the Internal Revenue Service for $10 billion in January — but on Monday he reportedly agreed to abandon his efforts. Some reports indicate he is still negotiating a $1.7 billion fund with the IRS to benefit victims of government excesses, but it’s unclear exactly where that amount stands.
US President Donald Trump on Monday dropped a lawsuit against the Internal Revenue Service (IRS), which sought $10 billion in damages over a leak of his tax returns.
In a filing in a federal district court in Florida, Trump, his two oldest sons Eric and Donald Jr. and the Trump Organization said they were withdrawing their action.
A former IRS contractor was convicted in 2023 of leaking the tax returns of Trump and other wealthy Americans to the media and was sentenced to five years in prison.
Trump’s decision to withdraw the lawsuits appears to be linked to a move to create a $1.7 billion compensation fund for the Republican president’s political allies who were investigated under Democratic predecessor Joe Biden.
Democrats like Rep. Jamie Raskin (MD-08), who was the House’s lead impeachment manager during Trump’s second impeachment and who still seeks to weaponize the government against the president and conservatives, are already crying out for any deal:
Rep. Jamie Raskin says Democrats will “without a doubt” file lawsuits against a possible settlement of President Trump’s lawsuit against the IRS, and urges his Republican colleagues to do the same.
“It’s a totally anarchic plan that is being presented, and if our Republican… pic.twitter.com/w8o7vb1Qtf
– This Week (@ThisWeekABC) May 17, 2026
Rep. Jamie Raskin says Democrats will “without a doubt” file lawsuits against a possible settlement of President Trump’s lawsuit against the IRS, and urges his Republican colleagues to do the same.
“This is a completely lawless plan that is being presented, and if our Republican colleagues have any respect for the Constitution and the powers of Congress, they will take action to block it.”
It was also “illegal” for IRS contractors to release Trump’s tax information, but I don’t see Raskin organizing any tax investigations into that.
Meanwhile, Rep. Alexandria Ocasio-Cortez (NY-14) and many other Democrats have expressed predictable outrage, calling the idea “pure corruption.” These same people were asleep at the wheel as Biden and his attack dog, Attorney General Merrick Garland, turned the DOJ into a revenge machine.
The settlement fund would benefit those who were targeted by former President Joe Biden’s administration, which turned the power of the federal government against its own people if it did not adhere to the progressive political narrative:
According to ABC News and other media outlets, the Trump Justice Department is considering creating a so-called “Truth and Justice Commission” for people who believe they have been unfairly prosecuted by the Biden administration.
This could include, for example, the hundreds of Trump supporters who were prosecuted for their involvement in the January 6, 2021 assault on the U.S. Capitol, which aimed to prevent Congress from certifying Biden’s election victory.
It’s unclear why Trump chose to drop the suit now, or whether a deal has been reached regarding the fund, but RedState will keep you updated as more information is released.
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