Donald Trump has withdrawn his $10 billion lawsuit against the Internal Revenue Service—paving the way for the president to set up a $1.7 billion slush fund for his allies.
The president filed the lawsuit against his own government, which the taxpayer would have been on the hook for, alleging that the agency failed to take steps to prevent the leak of his tax returns.
It was previously reported that Trump was considering shelving the lawsuit in order to create a $1.7 billion fund to compensate allies who claim they were wrongfully persecuted by the Biden administration, including those charged in connection with the Jan. 6 attack on the Capitol.
Trump’s move to withdraw his lawsuit against the IRS was confirmed in a legal filing in a federal court in Florida.
The compensation fund against those claiming they were victims of the “weaponization” of the justice system under President Joe Biden is part of a host of demands Trump agreed to in order to drop his lawsuit against the IRS, ABC News reported.
This includes demanding a public apology from the IRS and no longer demanding that the DOJ pay him roughly $230 million in compensation over the investigation into alleged Russian collusion during the 2016 election and the 2022 FBI raid of his Mar-a-Lago home over classified documents.
The $1.7 billion figure would come from the Treasury Department’s Judgment Fund, which the federal government uses to pay court settlements, damage claims, and other legal judgments.
The lawsuit stemmed from a damning report by The New York Times in September 2020 that Trump paid just $750 in federal income taxes in 2016 and 2017 and paid no income tax in several other years because he reported losing far more money than he earned.
The information arrived from a rogue IRS employee who is currently serving a five-year prison sentence after pleading guilty to stealing Trump’s tax data and leaking the president’s tax returns. Trump claimed he and his family suffered “embarrassment” and that their family business was “unfairly tarnished” as a result of reporting based on the leaked tax returns.
Nearly 100 House Democrats have filed a legal challenge to stop Trump from creating the $1.7 billion taxpayer-funded pool to compensate his allies.
“This is pure fraud and highway robbery,” Rep. Jamie Raskin, ranking member of the House Oversight Committee, said in a statement. “No one can be both plaintiff and defendant in the same case. And no president can concoct a fake case for $10 billion in damages against the government so he can be plaintiff and defendant and then ‘settle’ his bogus case against himself as a judge.
“This case is nothing but 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 at DOJ to hand out to his private militia of insurrectionists, rioters, and white supremacists, including those who brutally beat police officers on January 6, 2021, and sycophant accomplices to his election-stealing schemes.”
