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'A $1,700,000,000 Fraud': Trump Set to Drop IRS Suit in Exchange for MAGA Slush Fund
"This is a massive and unprecedented presidential plunder of the American people," said Rep. Jamie Raskin.
May 15, 2026
The top Democrat on the House Judiciary Committee on Thursday accused US President Donald Trump of "orchestrating a $1,700,000,000 fraud on the American taxpayer to line the pockets of his MAGA political allies" amid new reporting on the terms Trump is seeking in talks to settle his $10 billion lawsuit against the Internal Revenue Service.
ABC News reported late Thursday that Trump is expected to drop his lawsuit in the coming days "in exchange for the creation of a $1.7 billion fund to compensate allies who claim they were wrongfully targeted by the Biden administration." The money would come from the Treasury Department's Judgment Fund, which pays out court judgments and settlements against the federal government.
The president is also expected to receive a public apology from the IRS for the leak of his tax returns during his first White House term.
Rep. Jamie Raskin (D-Md.) said in a statement that the reported settlement terms represent "another installment" in Trump's "ongoing effort to turn the federal government into a personal cash machine for his unpopular extremist movement."
"This is a massive and unprecedented presidential plunder of the American people," said Raskin. "Worse still, this is only the beginning—a declaration that the prior payouts were just a down payment, and that he now intends to earmark billions more in taxpayer dollars for his political allies, sycophants, and private militia of unemployed insurrectionists."
“The president has no authority to conjure up billion-dollar compensation schemes or raid the Judgment Fund, which exists to settle valid lawsuits. Trump is systematically converting neutral government mechanisms into a presidential slush fund to build his army of political dependents," Raskin continued. "Congress must act immediately to reassert the power of the purse and stop this brazen looting of taxpayer funds before this ‘pilot program’ for corruption becomes the permanent operating system of our government."
According to ABC, which cited unnamed sources who emphasized that the settlement's terms should not be considered final until officially announced, the deal is "expected to prohibit Trump from directly receiving payments related to those three legal claims; however, entities associated with Trump are not explicitly barred from filing additional claims."
"The arrangement would be an unprecedented use of taxpayer dollars with little oversight," ABC noted. "Under the terms of the potential settlement agreement, President Trump would have the authority to remove members of the commission running the fund without cause, and the commission would be under no obligation to disclose its procedures or decision-making process for awarding more than a billion dollars."
ABC's story came on the heels of reports earlier this week revealing internal Justice Department discussions on settling Trump's lawsuit, which he filed in late January. Last month, a federal judge questioned the constitutionality of Trump's suit, noting that "he is the sitting president and his named adversaries are entities whose decisions are subject to his direction."
"Real story: Judge was about to throw out the case because Trump controls both parties," Rep. Dan Goldman (D-NY) wrote late Thursday. "Before it’s dismissed, Trump tells both parties to reach a 'settlement.' Settlement shields Trump from any future audit and creates a secret slush fund that can dole out money to anyone with no transparency."
"Mind-boggling corruption," Goldman added.
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'Disgusting Act of Corruption': Trump Sues IRS, Treasury for $10 Billion Over Tax Return Leak
"While Trump is weaponizing taxpayer privacy laws for his own benefit, his Treasury Department is flouting those exact same laws to send tens of thousands of individual tax records to his anti-immigrant henchmen at ICE."
Jan 30, 2026
President Donald Trump has sued the US Treasury Department and Internal Revenue Service for $10 billion over the leak of his tax returns during his first term in the White House, when the president broke with decades of tradition by refusing to voluntarily divulge the records.
The lawsuit—joined by Trump's two eldest sons and his family business, the Trump Organization—was revealed Thursday in a filing with the Miami division of the US District Court for the Southern District of Florida. The suit alleges that the IRS and Treasury Department "caused Plaintiffs reputational and financial harm, public embarrassment, unfairly tarnished their business reputations, portrayed them in a false light, and negatively affected President Donald Trump and the other Plaintiffs' public standing."
Charles Littlejohn, a former IRS contractor who was employed by Booz Allen Hamilton, pleaded guilty in late 2023 to one count of unauthorized disclosure of tax return information and was later sentenced to up to five years in prison.
The US Treasury Department, led by Scott Bessent, announced earlier this week that it was canceling all of its contracts with Booz Allen Hamilton, accusing the company of failing to "implement adequate safeguards to protect sensitive data, including the confidential taxpayer information it had access to through its contracts with the Internal Revenue Service."
The leak included the tax records of Trump and other mega-rich Americans, including Amazon founder Jeff Bezos and Tesla CEO Elon Musk. The New York Times, which obtained the records along with ProPublica, reported in 2018 that the returns showed Trump engaged in "outright fraud" and other "dubious" schemes to avoid taxation.
Trump, according to the Times investigation, "paid $750 in federal income taxes in 2016, the year he was elected president, and... he had not paid any income taxes in 10 of the previous 15 years."
US Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee, said in response to the president's lawsuit that “Donald Trump is a cheat and a grifter to his core, and for him to abuse his office in an attempt to steal $10 billion from the American taxpayer is a shameless, disgusting act of corruption."
"While Trump is weaponizing taxpayer privacy laws for his own benefit, his Treasury Department is flouting those exact same laws to send tens of thousands of individual tax records to his anti-immigrant henchmen at ICE," Wyden continued. "It is the height of hypocrisy for Trump to pretend he cares one bit about taxpayer privacy."
Journalist Tim O'Brien, who has covered Trump for decades, called the lawsuit "a flagrant and obvious conflict of interest."
"Trump oversees the IRS. He wants the IRS to pay him a big chunk of change," O'Brien wrote on social media. "He is, and always has been, in it for the money."
The lawsuit isn't the first time Trump has sought a large sum of taxpayer money from a federal agency during his second term in office. Last year, Trump demanded via an administrative claims process that the US Justice Department pay him roughly $230 million in compensation for federal investigations he has faced.
Trump launched his attempt to wring $10 billion in taxpayer money out of the Treasury Department and IRS as he and his allies worked to gut the tax agency, leaving it with inadequate staff and resources to audit wealthy individuals and large corporations. The IRS is currently headed by Frank Bisignano, who was named "chief executive officer" of the agency late last year.
In a letter to Bessent and Bisignano earlier this week, Wyden and a group of fellow Senate Democrats warned that "the administration’s plans for the IRS"—including painful budget cuts—"will shift the burden of audits more heavily onto working Americans while giving rich scofflaws and big businesses a green light to cheat on their taxes."
"The administration has failed to detail any serious plan to avoid that unfair outcome," the senators warned.
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'The Guy Is a Hero': IRS Contractor Who Leaked Trump Tax Returns Gets Max Sentence
"Billionaires control our lives and our government and pay... lower tax rates than the rest of us, but this is the bad guy who should be punished with a five-year prison sentence?"
Jan 29, 2024
As the U.S. tax season began Monday, a former Internal Revenue Service contractor who leaked to the media the tax records of wealthy Americans including ex-President Donald Trump was sentenced to five years in prison and ordered to pay a $5,000 fine.
U.S. District Judge Ana C. Reyes, an appointee of President Joe Biden, handed down the maximum sentence to Charles Littlejohn, who pleaded guilty to unauthorized disclosure of tax returns and return information in October. Littlejohn gave The New York Times information on Trump—who is expected to face Biden in the November election—and shared with ProPublica data on Jeff Bezos, Michael Bloomberg, Warren Buffett, Bill Gates, Rupert Murdoch, Elon Musk, Mark Zuckerberg, and more.
While Reyes called the decision to release Trump's filings "an attack on our constitutional democracy" and Littlejohn told the court that he "acted out of a sincere but misguided belief that I was serving the public," others framed the 38-year-old's move as heroic.
"This guy is a hero who showed us how the superrich steal from the American public,"
Slate politics writer Alexander Sammon said Monday. "Naturally, the judge gave him a max sentence, claiming it was 'a moral imperative' to punish him as harshly as possible."
Jeff Hauser of the Revolving Door Project noted that "this whistleblower's cause has been ignored by a LOT of people who have defended much more intrusive leaking. (Tax returns were public in the past, are in some countries now, and should be fully transparent—they're inherently public information, unlike, e.g., John Podesta's emails)."
People's Policy Project founder Matt Bruenig similarly pointed out that "in Finland, these returns are public record available to anyone who wants to see them."
After decades of presidential candidates voluntarily releasing income tax returns, Trump declined to do so—breaking his promise to make them public. The Republican also unsuccessfully fought to block Congress from receiving some of his tax records.
After the sentencing on Monday, Littlejohn's attorney told reporters that his only statement was to thank the court for consideration of the case. Meanwhile, Acting Assistant Attorney General Nicole M. Argentieri of the U.S. Department of Justice's (DOJ) Criminal Division said that his "sentence sends a strong message that those who violate laws intended to protect sensitive tax information will face significant punishment."
When Littlejohn pleaded guilty last year, ProPublica declined to comment other than reiterating that the news outlet "doesn't know the identity of the source who provided this trove of information on the taxes paid by the wealthiest Americans."
Charlie Stadtlander, a spokesperson for the Times, said last year that "we remain concerned when whistleblowers who provide information in the public interest are prosecuted. The Times' reporting on this topic played an important role in helping the public understand the financial ties and tax strategies of a sitting president—information that has long been seen as central to the knowledge that voters should have about the leader of our government and the candidates for that high office."
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On Greed and Tax Avoidance, Says Bernie Sanders, 'Trump Is Not Alone'
"Yes. Dr. King was right," says the U.S. Senator from Vermont. "We have socialism for the rich, rugged capitalism for the rest."
Dec 31, 2022
Senator Bernie Sanders is not asking anyone to be shocked that Donald J. Trump was very good at not paying taxes, but he also wants people to know that the disgraced former Republican president is far from the only rich person or powerful corporation who gets away with paying little or nothing each year federal income tax.
In a tweet on Friday evening, Sanders said: "When it comes to tax avoidance, Trump is not alone."
Sanders then listed a handful of well-known and highly-profitable companies that paid nothing in federal income tax in 2020, the most recent year detailed figures are available for many companies.
"Yes. Dr. King was right," added Sanders: "We have socialism for the rich, rugged capitalism for the rest."
On Friday, the House Ways and Means Committee released to the public Trump's tax returns after a yearslong legal fight to obtain them from the IRS after the former president broke with precedent by refusing to release them voluntarily.
What the returns and associated documents released by the committee show is an inside look into how very wealthy individuals diminish their tax liability or pay nothing at all year after year.
Specifically in 2020, Trump—despite his vast business holdings—paid no federal income taxes at all. Also in 2020, despite repeated promises to the public that he would donate all his presidential salary to charity, the New York Times reported Saturday that the tax returns reveal he made no charitable gifts that year.
According to the Institute on Taxation and Economic Policy (ITEP), at least 55 major U.S. corporations—including those named by Sanders—paid $0 in federal taxes on massive profits in 2020.
ITEP's analysis shows that these 55 corporations "would have paid a collective total of $8.5 billion for the year had they paid [the staturory federal rate of 21 percent]." Instead, including by benefiting greatly from the tax law that Trump and a GOP-controlled Congress passed in 2017, those companies collectively "received $3.5 billion in tax rebates."
In all, that's $12 billion less in taxes paid by some of the most profitable and largest companies in the nation.
As numerous outlets have detailed, Bloomberg's reporting states how "massive losses and large tax deductions in Donald Trump's returns reveal how the former president was able to use the tax code to minimize his income tax payments." According to the outlet:
The records illustrate how Trump, as a business owner and a real estate developer, is eligible for a bevy of tax breaks that most taxpayers can’t claim. The filings, which cover 2015 to 2020, also detail how Trump was affected by the 2017 tax-cut bill he signed into law.
The documents further show the sheer complexity of the tax code. As for many US business owners, the filings span hundreds of pages to account for domestic and foreign assets, credits, deductions, depreciation, and more.
Warren Gunnels, a top aide and advisor to Sen. Sanders, said Friday night that far-reaching tax breaks is not the only benefit that Trump received which too many regular people are still denied in the United States: free, taxpayer-funded healthcare.
Throughout his presidency, including when he was suffering from Covid-19, Trump was provided care via the Veterans Administration.
"In 2020, not only did Trump pay nothing in federal incomes taxes, not only did he get a $5.47 million tax refund, he also paid ZERO for his hospital stay at Walter Reed—a 100% government-run hospital," tweeted Gunnels.
"Yes," he added, echoing Sanders. "Trump loves socialism for himself, rugged capitalism for the rest."
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House Panel Releases Six Years of Donald Trump's Tax Returns
"Trump used questionable or poorly substantiated deductions and a number of other tax avoidance schemes as justification to pay little or no federal income tax," said one House Democrat.
Dec 30, 2022
After a protracted legal fight and relentless obstruction by the former president, the House Ways and Means Committee on Friday finally released six years of Donald Trump's individual and business tax returns.
"It is a bittersweet moment," Rep. Bill Pascrell (D-N.J.), a member of the House Ways and Means Oversight Subcommittee, wrote on Twitter, lamenting how long it took for lawmakers to obtain the documents and make them public. "I will read through them today and you should too. Every American deserves this sunlight. This is what democracy is about."
A download link for the returns, which span 2015 to 2020 and are redacted to conceal sensitive personal information such as Social Security numbers, is here (warning: the file is very large—1.1 GB—and in ZIP format).
Citizens for Responsibility and Ethics in Washington (CREW) also published the documents as more easily downloadable PDFs on its website.
The long-awaited release of the documents came after the House Ways and Means Committee voted last week to make them public. The committee also published a summary confirming that Trump—who broke with longstanding tradition by refusing to release the documents voluntarily—paid just $750 in federal income taxes in 2016 and 2017 and $0 in 2020.
The summary made clear that Trump turned to avoidance tactics that the ultra-rich often use to slash their tax bills. In the years covered by the newly published documents, the former president reported massive net operating losses, allowing him to dramatically reduce or completely zero out his tax liabilities.
The House committee, which Democrats control until next week, also revealed earlier this month that the IRS didn't begin auditing Trump's taxes until 2019, despite the agency's mandatory presidential audit policy.
"Trump acted as though he had something to hide, a pattern consistent with the recent conviction of his family business for criminal tax fraud," Rep. Don Beyer (D-Va.), a member of the House tax panel, said in a statement Friday. "As the public will now be able to see, Trump used questionable or poorly substantiated deductions and a number of other tax avoidance schemes as justification to pay little or no federal income tax in several of the years examined."
"These findings underscore the fact that our tax laws are often inequitable, and that enforcement of them is often unjust," Beyer continued. "Trump was able to bypass even the mandatory IRS presidential audit program for years, but many other wealthy and powerful people evade billions in tax dues every year through more quotidian tax avoidance. Congress has so much work to do to make tax enforcement in this country fairer."
In response to the release of his returns, Trump—a 2024 presidential candidate—proudly touted his expansive use of deductions to lower his tax bills.
"The 'Trump' tax returns once again show how proudly successful I have been and how I have been able to use depreciation and various other tax deductions as an incentive for creating thousands of jobs and magnificent structures and enterprises," the former president said.
"The radical, left Democrats have weaponized everything," he fumed, "but remember, that is a dangerous two-way street!"
The former president's returns show that he personally benefited from some of the provisions of the tax-cut measure he signed into law in 2017. As Bloomberg noted, Trump took advantage of the law's "expanded write-offs for business expenses" and "the scaling back of the alternative minimum tax, or AMT, allowing him to claim more individual deductions."
"Trump acted as though he had something to hide, a pattern consistent with the recent conviction of his family business for criminal tax fraud."
Writing for The Atlantic on Friday, CREW president Noah Bookbinder urged the Senate Finance Committee to investigate the IRS' failure to audit Trump in the early years of his presidency.
"The public needs to know whether one more key government function was politicized, allowing a president to shield possible conflicts of interest and escape accountability," Bookbinder wrote. "The American people need reassurances that transparency, oversight, and accountability will once again become matters of course rather than subjects of prolonged litigation."
"Donald Trump attempted to hijack the United States government to keep himself in power, and American democracy almost didn't survive," he added. "His tax returns may have been another part of that effort. That merits investigation—not over another six years, but now."
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With GOP House Control Looming, Pascrell Calls for Swift Release of Trump Tax Records
"Donald Trump tried to hide his tax returns from our oversight but after 1,329 days we have finally obtained the documents," said the New Jersey Democrat. "We should review and release them."
Dec 02, 2022
It took U.S. House lawmakers more than three-and-a-half years to get their hands on former President Donald Trump's federal tax returns, but with Republicans assuming control of the chamber next month, Democrats are quickly running out of time to examine and publish the highly sought-after records.
"There is no one in this country... that is above the law."
That's the stark warning issued Thursday by Rep. Bill Pascrell (D-N.J.), who told Punchbowl News: "There's a time factor here. We got [until] January 3. And that doesn't count up to too much time to me."
Pascrell's comments came after he and other Democratic members of the House Ways and Means Committee, which obtained six years of Trump's tax returns on Wednesday following a prolonged legal battle in which the ex-president fought against sharing the financial documents that all of his predecessors since the 1970s had willingly disclosed, met in Chair Richard Neal's (D-Mass.) office.
As Punchbowl News reported Friday, "Neal is facing pressure from Ways and Means Democrats to move quickly to analyze Trump's returns--and possibly release them to the public--before Republicans take over and make the whole question moot."
"But Neal is providing little detail about how he plans to spend the next 32 days," the outlet noted. "In fact, the Massachusetts Democrat wouldn't even acknowledge gaining access to six years of Trump's tax returns, citing privacy laws. His nonanswer comes despite the Treasury Department saying this week it had turned over the information to the panel after the Supreme Court declined to intervene in the long-running battle with Trump."
On more than one occasion, Trump--who officially launched his 2024 campaign last month--argued in court that if Democrats were to obtain his tax records, they would immediately leak them to hurt him politically. Neal's awareness of this claim was evident as he answered reporters' questions on Thursday.
"It's very sensitive information," said Neal. "We intend to deal with it professionally the way that we have."
In contrast to the committee chair's hesitant approach, multiple Democrats on the panel, including Pascrell and Rep. Lloyd Doggett (D-Texas), have made clear their desire to make Trump's tax returns publicly available.
Speaking with MSNBC on Thursday, Pascrell said, "I want them all released."
"These records are so important. The delay has been as long as the Civil War," Pascrell continued. "This is unprecedented in every way. This isn't about one man. This is not about just one part of the law. This is whether we affirm that there is no one in this country--be it the president, a congressman, or whomever--that is above the law. And we intend to follow through on this."
Democrats will be racing against the clock, however.
According to Punchbowl News:
The only real information Neal divulged was that he has appointed an undisclosed number of staff to serve as "agents"--experts who can officially review Trump's tax documents.
Democrats on the panel didn't get much more info from Neal in their closed-door meeting either, according to several members we checked with after. The discussion was tense at times, with members "extremely frustrated" about the lack of transparency regarding next steps with so little time left, one Democrat told us. Led by some of their senior colleagues on the panel, Neal was grilled about his intentions and offered little on his plans.
Doggett, for his part, predicted that "before January 3, we will get some opportunity to determine--probably in executive session--whether what [the agents] found justifies our taking some further action, which could include, but does not necessarily include, releasing those to the public."
"Personally, my opinion is that it'd be very difficult for even the most skilled agent to review these documents thoroughly," he added. "I believe that reviewing them thoroughly may well indicate the need to look at some of the documents we don't even yet have."
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