Trump drops $10B IRS lawsuit as DOJ unveils $1.8 billion ‘Anti-Weaponization Fund’ for alleged political targets
(May 19, 2026) The Trump administration announced Monday that Donald Trump and his family have agreed to drop a $10 billion lawsuit against the Internal Revenue Service in exchange for the creation of a nearly $1.8 billion federal compensation program dubbed the “Anti-Weaponization Fund.”
According to Trump’s Justice Department, the $1.776 billion fund is designed to compensate individuals who claim they were unfairly targeted, investigated, or prosecuted by prior administrations — particularly during the Biden era. Acting Attorney General Todd Blanche said the program would create “a lawful process for victims of lawfare and weaponization to be heard and seek redress.”
Trump, Donald Trump Jr., Eric Trump, and the Trump Organization had sued the IRS earlier this year, alleging that leaks of Trump’s confidential tax records caused reputational damage, financial harm, and public embarrassment. The suit centered on disclosures made between 2018 and 2020 by former IRS contractor Charles Littlejohn, who was sentenced in 2024 to five years in prison after pleading guilty to leaking tax information to media outlets.
As part of the settlement, the Trump family will not receive direct monetary damages, though the Justice Department said they will receive a formal apology.
The new compensation fund will be financed through the federal government’s Judgment Fund, a permanent Treasury appropriation typically used to settle lawsuits against the United States. A five-member commission appointed by the attorney general will oversee claims, issue formal apologies, and determine monetary awards. One commissioner will reportedly be selected in consultation with congressional leadership.
The Justice Department said there are “no partisan requirements” for applicants, but officials have not identified specific eligibility standards or who may ultimately receive payouts. That uncertainty fueled immediate backlash from Democrats, legal experts, and government watchdog groups.
Critics warned the fund could potentially benefit January 6 Capitol riot defendants and Trump allies previously investigated by federal prosecutors. Trump himself acknowledged Monday that compensation decisions would be left to the commission, saying, “It’ll all be dependent on a committee.”
The administration has already taken steps favorable to some Trump supporters, including pardoning or commuting sentences tied to the January 6, 2021 Capitol attack and settling claims brought by Trump allies such as Michael Flynn and anti-abortion activist Mark Houck.
House Judiciary Committee ranking Democrat Rep. Jamie Raskin blasted the agreement, calling it “a racket designed to take $1.7 billion of taxpayer dollars out of the Treasury and pour it into a huge slush fund for Trump.” Citizens for Responsibility and Ethics in Washington labeled the arrangement “one of the single most corrupt acts in American history.”
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Ethics experts also questioned the legality and oversight structure of the fund. Columbia University law professor Richard Briffault described it as an “open-ended slush fund,” while former DOJ pardon attorney Liz Oyer alleged the arrangement lacked transparency and meaningful safeguards.
The deal is also facing legal scrutiny. Nearly 100 House Democrats have signed on to a legal brief urging a federal judge to block the settlement, arguing it is unconstitutional and improperly enriches Trump allies with taxpayer money. U.S. District Judge Kathleen Williams additionally criticized the government for failing to fully disclose details of the settlement during court proceedings.
The fund is not yet entirely settled politically or legally. While the Justice Department says the Treasury will transfer the money within 60 days, congressional Democrats and watchdog organizations are expected to challenge the arrangement in court and potentially through legislation or oversight hearings.
Blanche is expected to face questions about the program Today during testimony before Congress on the Justice Department’s budget.
For more on the story, see the video accompanying this article.
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(Sources: UPI, The Associated Press, Fox News, CBS News, MSN)
Posted by Richard Webster, Ace News Today
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