Trump sued his own government for $10 billion, then settled with himself: a $1.8 billion fund and a permanent ban on auditing his family

In January 2026, Trump, his sons Donald Jr. and Eric, and the Trump Organization sued the IRS and the Treasury Department, the government he runs, for $10 billion, over a contractor's leak of Trump's tax returns to The New York Times and ProPublica in 2019 and 2020. Legal experts noted the statute of limitations appeared to have expired.

In May 2026, two days before a court deadline on whether the case could proceed, Trump dropped the suit in exchange for a settlement. It created a nearly $1.8 billion "Anti-Weaponization Fund" from taxpayer money to pay people who say the government targeted them. A day later, Todd Blanche, then acting attorney general and Trump's former personal lawyer, signed a one-page order permanently barring the IRS from examining past tax returns of Trump, his family, their trusts and companies. It could also end a dispute over a $72.9 million refund Trump had claimed.

Separately, Trump filed administrative claims asking his own Justice Department for $230 million over the Russia investigation and the Mar-a-Lago documents search. The officials in line to decide those claims had themselves been his personal lawyers.

On July 13, 2026, U.S. District Judge Kathleen Williams ruled the lawsuit and settlement were the product of collusion, found the plaintiffs acted in bad faith, ordered sanctions and referred their lawyers for discipline. Another judge blocked the fund, and the administration abandoned it in June. To win confirmation as attorney general, Blanche agreed in writing to narrow the audit ban and end the payments, though critics question whether that promise is enforceable.