Sources: Trump Poised To Drop IRS Suit, Launch $1.7B ‘Weaponization’ Fund For Allies
President Donald Trump is reportedly preparing to withdraw his massive lawsuit against the Internal Revenue Service as part of a proposed agreement that would establish a $1.7 billion compensation fund for individuals who claim they were harmed by what supporters describe as the Biden administration’s “weaponization” of government agencies.
According to sources familiar with the discussions, the proposed fund would be overseen by a commission with broad authority to distribute approximately $1.7 billion in taxpayer money to claimants alleging they were unfairly targeted by the federal government. Potential recipients could include many of the nearly 1,600 individuals charged in connection with the January 6 Capitol riot, along with organizations and entities tied to President Trump.
Sources cautioned that while the settlement is expected to be finalized within days, negotiations remain ongoing and the exact terms have not yet been officially completed.
In addition to receiving a public apology from the IRS, Trump is reportedly demanding creation of the compensation fund in exchange for dropping multiple legal actions he filed against the federal government. Those cases include his $10 billion lawsuit over the 2019 leak of his tax returns, as well as roughly $230 million in claims connected to the 2022 FBI search of Mar-a-Lago and the Russia collusion investigation conducted during his first term.
Under the proposed arrangement, Trump himself would reportedly be barred from personally receiving money tied directly to those legal disputes. However, sources said entities affiliated with him would not necessarily be prohibited from pursuing separate compensation claims.
Responding to questions from ABC News, a spokesman for Trump’s legal team defended the lawsuits and blasted the release of the president’s financial records.
“The IRS wrongly allowed a rogue, politically-motivated employee to leak private and confidential information about President Trump, his family, and the Trump Organization to the New York Times, ProPublica and other left-wing news outlets, which was then illegally released to millions of people. President Trump continues to hold those who wrong America and Americans accountable.”
A Justice Department spokesperson declined to comment on the matter. Officials from both the IRS and Treasury Department also did not immediately respond to requests for comment.
According to sources, the proposed compensation fund would likely be financed through the Treasury Department’s Judgment Fund, a permanent federal account used to pay legal settlements and court judgments.
The arrangement would mark an unusual use of taxpayer money and could face legal challenges due to the structure of the proposed commission. Sources said Trump would reportedly have the power to remove commission members at will, while the panel itself would not be required to publicly disclose how decisions were made regarding distribution of more than $1 billion in awards.
The proposal has reportedly generated ethical concerns within parts of the administration, particularly because Trump is simultaneously suing federal agencies while potentially maintaining influence over an entity empowered to distribute large sums of government money to political allies.
Last year, Trump acknowledged the unusual optics surrounding the lawsuits while insisting any personal financial recovery would be donated.
“It’s interesting because I’m the one that makes a decision, right, and, you know, that decision would have to go across my desk,” Trump said in the Oval Office in October. “It’s awfully strange to make a decision where I’m paying myself.”
The proposed agreement would also address concerns raised by the federal judge overseeing Trump’s IRS lawsuit. U.S. District Judge Kathleen Williams recently ordered Trump and the Justice Department to explain why the case should continue, questioning whether the president and the federal agencies he oversees are truly adverse parties in the litigation.
“Moreover, 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. Indeed, President Trump’s own remarks about this matter acknowledge the unique dynamic of this litigation,” she wrote.
The New York Times previously reported that Justice Department officials were evaluating ways to resolve the IRS lawsuit ahead of the court’s upcoming deadline.
Since Trump issued sweeping pardons to defendants charged in connection with the January 6 Capitol riot, many of those individuals have begun seeking compensation from the federal government.
Speaking to Newsmax last year about the possibility of creating a compensation fund for January 6 defendants, Trump indicated there was support for the idea within the government.
“a lot of the people that are in government now talk about it” because they “really like that group of people.”
“They were patriots as far as I was concerned,” Trump said last year. “I talk about them a lot. They were treated very unfairly.”
Earlier this year, House Democrats introduced legislation that would prohibit January 6 defendants from receiving government compensation.
Sources familiar with the discussions described the proposed fund as a hybrid between a victim compensation program and a truth-and-reconciliation-style commission. Comparisons have reportedly been made to compensation systems established after the Deepwater Horizon oil spill, as well as international truth and reconciliation efforts tied to apartheid-era South Africa and Canada’s residential school system.
Over the past year, the Justice Department has also operated a “Weaponization Working Group” tasked with reviewing what officials describe as abuses carried out by the Biden administration, including allegations of anti-conservative and anti-Christian bias — accusations disputed by former government officials.
According to sources, Trump’s proposed commission would consist of five members who would approve financial awards through majority vote. The identities of recipients, as well as the details of the award process itself, could remain confidential.
Any unused money remaining in the fund would reportedly revert back to the federal government shortly before Trump leaves office, sources said.
{Matzav.com}
