The unprecedented agreement announced Tuesday by Attorney General Todd Blanche that resolves President Trump’s $10 billion lawsuit against the IRS could save Trump a huge sum of money — potentially more than $100 million.
The agreement establishes a roughly a $1.8 billion “anti-weaponization” fund intended to compensate people who claim they were unjustly prosecuted or otherwise abused by the justice system for political reasons, including some of Trump’s supporters who were involved in the January 6, 2021, riots at the Capitol. At the same time, it also brings all investigations by the IRS into Trump and his family and businesses to a permanent halt. That would mean that a long-running investigation into Trump’s taxes will be shut down, eliminating the risk that he could be hit with a massive bill for back payments and penalties.
Although it’s not clear what the status is of any of the IRS audits into Trump’s complex finances, there has been no announcement that they were resolved, and Trump has used the long-running audits to explain why he cannot release his historical tax returns for public review.
An investigation by The New York Times of Trump’s tax history published in 2020 found that he had been battling the IRS over multiple issues, including a roughly $72 million refund Trump claimed more than 15 years ago, based on losses of more than $1 billion he reported in 2008 and 2009. If the IRS found that the refund claim was improper, as it had argued, Trump could have owed more than $100 million in repayments and penalties.
Trump denies involvement: On Wednesday, Trump said he had nothing to do with the establishment of the compensation fund, which critics are describing as a slush fund for the president to use to reward his supporters.
“I released them from the lawsuit and I guess they made a settlement of some kind,” he told reporters, referring to the IRS. “I wasn’t involved in the settlement. I could have been involved, but I didn’t choose to be.”
Trump said the fund was going to be used to reimburse people for the legal costs associated with what he called abuse by the Obama and Biden administrations. “People were destroyed, they went to jail,” Trump said. “Their families were ruined, they committed suicide.”
Trump added that the reimbursement costs were “peanuts” compared to the value of lives he said had been destroyed.
Raskin aims to block: Rep. Jamie Raskin, the senior Democrat on the House Judiciary Committee, introduced legislation on Wednesday that would prohibit the government from making payments from the compensation fund.
The “No Taxpayer-Funded Settlement Slush Funds Act of 2026” would directly prohibit the use of federal funds to create the fund established by the agreement announced on Tuesday, according to a statement released by Raskin. It would also impose “sweeping new restrictions to prevent taxpayer dollars from being steered to January 6 rioters, MAGA sycophants, senior government officials, and members of the President or Vice President’s family.”
Raskin, a constitutional lawyer, noted that only Congress has the power to appropriate funds, and lawmakers have not done so for the compensation fund. “That’s why I’m introducing the No Taxpayer-Funded Settlement Slush Funds Act to shut down this highway robbery and restore basic guardrails on how taxpayer dollars are spent,” Raskin said.
The Democrat may get support from some Republicans. Asked about the fund, Rep. Brian Fitzpatrick said: “We’re gonna try to kill it.”
“We’re considering legislative options. We’re gonna write a letter to the [attorney general] to start, but we’re considering a legislative option,” Fitzpatrick added. “We’re trying to unpack exactly, you know, what the legal machinations are, but you can’t do that.”
Police officers sue: Two police officers who were attacked by violent Trump supporters at the Capitol on January 6, 2021, filed a lawsuit Wednesday that seeks to prevent the creation of the “anti-weaponization” compensation fund. Trump, Blanche and Treasury Secretary Scott Bessent are named as defendants.
Filed by former Capitol Police Officer Harry Dunn and Metropolitan Police Officer Daniel Hodges, the lawsuit contends that the Trump administration has created a “slush fund to finance the insurrectionists and paramilitary groups that commit violence in his name,” and has exceeded its authority by acting without congressional authorization.
“Although Trump and his cronies have been secretive about the fund’s ends, reporting leaves no doubt that it will be used, among other purposes, to pay the nearly 1,600 people charged with attacking the Capitol on Jan. 6, 2021,” the lawsuit says.
One of the lawyers filing the suit, former federal prosecutor Brendan Ballou, said the compensation fund would produce “enormous physical dangers” for the police officers. “The fund is stunningly, blindingly illegal, and the defendants must be prohibited from transferring money to this corrupt and illegal monstrosity,” Ballou said in a statement.
Trump supporters celebrate: Some of Trump’s supporters, including those who rioted at the Capitol on January 6, say they are delighted that the fund is being created.
“I lost my career,” January 6 rioter Dominic Box, who spent more than a year in jail, told CNN. “I look forward to financial compensation. I need it. This will be a welcome relief.”
Mike Lindell, the CEO of MyPillow and a staunch Trump supporter, said he thinks his company lost $400 million in the wake of the 2020 election. Lindell was one of the most prominent proponents of the baseless claim that the election was marred by massive voter fraud, resulting in his being sued and investigated.
“I would say we were the number-one company in the world hurt by our own government,” Lindell said.