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Justice Department Weighs Settling Trump's $10 Billion IRS Lawsuit
The Justice Department is considering whether to settle President Donald Trump's $10 billion lawsuit against the IRS, according to two sources familiar with the matter.
Trump filed the suit in January as a private citizen, accusing the agency of allowing an unauthorized leak of his tax returns during his first administration. The lawsuit claims former government contractor Charles Littlejohn illegally obtained the returns and shared them with the New York Times and ProPublica. Littlejohn has since been sentenced to five years in prison.
Any settlement would put the government in unusual territory. If a monetary agreement is reached, the Trump Justice Department would effectively be paying the president himself, raising ethical questions that have no real precedent. It also remains unclear whether a settlement would require the IRS to drop ongoing audits of Trump, members of his family, and their business holdings.
The lawsuit itself has already drawn scrutiny. Last month, a federal judge questioned whether it was even constitutional, ordering a hearing to determine whether a sitting president can sue federal agencies that he oversees.
By: NBC Palm Springs
May 14, 2026
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