An unprecedented legal settlement has opened a nearly $1.8 billion taxpayer-funded pot of money. Who can access it? Allies of President Donald Trump who claim they were unfairly investigated by the government.
The “Anti-Weaponization Fund” and a separate agreement barring the IRS from bringing past tax claims against Trump, his family, or his businesses have immediately drawn sharp criticism. Democrats, public interest groups, and former government officials say Trump is using the levers of government to set up a vast piggy bank for his supporters while shielding himself from scrutiny.
“It’s highly unusual,” said retired Judge William Smith, a George W. Bush appointee. “It seems to me that it’s a fairly thinly veiled attempt to funnel federal money to people that are sympathetic to the president’s cause and points of view without following the kind of usual procedures.”
The Lawsuit That Started It All
Trump sued the IRS in his personal capacity in January over the disclosure of his and his company’s tax returns in 2019 and 2020. The lawsuit — seeking $10 billion in damages — accused the agency of failing to safeguard his sensitive tax information, which was leaked by a government contractor who has since been prosecuted.
While a sitting president suing an agency his own administration controls is unusual enough, legal experts say the settlement is even more extraordinary.
“I am unaware of any other president suing the IRS in the manner that Trump has chosen to do,” said Joseph J. Thorndike, a contributing editor with Tax Notes magazine. “And as a result, I’m not aware of the IRS having settled any suit with a sitting president.”
“The president is at the top of the executive branch,” said Stacey Young, a former longtime DOJ attorney. “When he sues the executive branch, he is in effect suing himself.”
The IRS Audit Shield
In a section of the agreement quietly posted on the DOJ website, the IRS is now “FOREVER BARRED and PRECLUDED” from prosecuting or pursuing “claims” or “examinations” arising from matters pending before the IRS, including “tax returns” filed by Trump before the agreement was reached. The language applies not just to Trump, but to his family, trusts, companies, and other affiliates.
Rep. Richard Neal, the senior Democrat on the House Ways and Means Committee, condemned the addition as “corruption.”
The $1.8 Billion Fund
The Justice Department said the fund was created to resolve Trump’s lawsuit as well as administrative claims he brought over the Mar-a-Lago search warrant and the investigation into Russian meddling in the 2016 election. The payments will come from the DOJ’s Judgment Fund — taxpayer money set aside by Congress for monetary settlements.
The fund will be run by a commission whose members are chosen by Trump’s attorney general and who can be fired by the president at any time. One of the five members will be chosen in “consultation” with Congress.
Adam Zimmerman, a law professor specializing in mass litigation, said that while previous presidents have brokered major settlements to advance their agendas, the deal announced Monday is “leaps and bounds away” from past practice. Trump, Zimmerman said, is “leveraging his private persona and his status as a private litigant to accomplish all of these public goals associated with his administration.”
Can the Fund Be Stopped?
Trump’s critics face procedural hurdles. The federal judge in Miami who had been overseeing the case agreed to fully close the matter, scotching hopes that she would scrutinize the behavior of the Trump Justice Department.
Legal observers have floated potential lawsuits under the Constitution’s Emoluments Clause or the Administrative Procedures Act. But standing — the legal right to sue — is a significant barrier. Supreme Court precedent has foreclosed taxpayer standing except in very limited circumstances.
“I would be shocked if there isn’t some kind of an effort to stop it in its tracks,” said former judge William Smith.
The Bottom Line
President Trump’s settlement with the IRS creates a nearly $1.8 billion taxpayer-funded “Anti-Weaponization Fund” for allies who say they were unfairly investigated by the government. The deal also bars the IRS from bringing past tax claims against Trump, his family, or his businesses. Legal experts say the arrangement is unprecedented — a sitting president sued an agency he controls, then settled on terms that benefit his supporters and shield himself. Democrats have called it corruption. Whether anyone can stop it in court remains an open question.
