Politics
May 16, 2026
Trump's $1.7bn Fund to Compensate Allies Raises Concerns Over Self-Dealing
Donald Trump's $10bn lawsuit against the IRS may be settled for $1.7bn to compensate allies, raisin…
The Alleged Settlement
There is growing concern that Donald Trump’s massive $10bn lawsuit against the Internal Revenue Service may soon be settled by his own administration – an unprecedented, self-dealing maneuver for a US president, in which billions of taxpayer dollars could be transferred to the president or his allies.
The Terms of the Settlement
Trump may agree to drop his lawsuit in exchange for the launch of a $1.7bn fund to compensate people he says were wrongfully targeted by the Biden administration, according to reports by ABC News and the New York Times.
Among those eligible to receive compensation from the fund are more than 1,500 January 6 rioters.
The treasury department’s Judgment Fund, a pool of taxpayer funds reserved to pay out court judgments and settlements, would allegedly become the vehicle for Trump’s self-styled victim compensation fund.
The Lawsuit's Background
Trump’s January lawsuit, in which he, along with two of his sons and the Trump family business, sued the government’s tax arm for $10bn dollars in damages for the leak of his personal tax returns to the New York Times and ProPublica during his first term.
The Data Analysis
If the case is settled for the full amount Trump is requesting, a $10bn payment would more than double his family’s net worth. The sum is equivalent to about two-thirds of the IRS’s total budget for the 2026 fiscal year, and would be five times greater than any other award paid by the treasury’s Judgment Fund from January 2020 to September 2025.
The Impact Analysis
The case is the latest example of how Trump has taken over the justice department – which typically operates at arm’s length from the White House – and deployed it for his own ends. He has used the agency to prosecute political rivals, and the acting attorney general, Todd Blanche, has shown a willingness to carry out Trump’s wishes.
The Prediction
Legal advocates say there’s a risk of a collusive settlement with the president, even though similar lawsuits have failed. “There’s no difference between Trump directing the IRS to pay his family billions of dollars to settle the case, versus telling the treasury secretary that he deserves a $10bn bonus because he claims to be the smartest president ever,” said Andrew Warren, the deputy legal director at the Democracy Defenders Fund.
#Donald Trump
#IRS
#US Justice Department
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