Trump’s IRS Lawsuit Could Be Invalid—Here’s Why He Could Still Get $1.7 Billion Anyway

BreakingBusinessTrump’s IRS Lawsuit Could Be Invalid—Here’s Why He Could Still Get $1.7 Billion AnywayByAlison Durkee,Forbes Staff. Alison is a senior news reporter covering US politics and legal news.Follow AuthorMay 15, 2026, 01:01pm EDT--:-- / --:--This voice experience is generated by AI. Learn more.This voice experience is generated by AI. Learn more.ToplinePresident Donald Trump is reportedly poised to settle his lawsuit against the Internal Revenue Service over his leaked tax returns and secure a $1.7 billion fund for his political allies, potentially allowing him to use the court system to get a taxpayer-funded windfall even without a ruling in his favor for a lawsuit that could be invalid to begin with.President Donald Trump speaks at Verst Logistics on March 11 in Hebron, Kentucky. Getty ImagesKey FactsABC and The New York Times report Trump and the IRS are preparing to settle Trump’s $10 billion lawsuit against the agency, first filed in January, in which Trump alleges the IRS failed to keep his tax returns confidential after a contractor disclosed details of his taxes to news outlets.ABC reports the settlement would force the government to create a $1.7 billion fund to compensate people who claim to have been victims of the Biden administration’s purported “weaponization” of the Justice Department, including Jan. 6 rioters, while the Times reports any settlement could also involve the IRS dropping its ongoing audits of the president and his businesses.News of the potential settlement comes as Judge Kathleen Mary Williams has been preparing to decide whether the litigation is even valid to begin with, given Trump is suing a federal agency he controls as president.Lawsuits can’t be brought unless there are at least two “adverse” parties with opposing interests—given that otherwise, the parties could cooperate in the case and use litigation to benefit their interests—and Williams said it’s “unclear” whether Trump and the IRS are actually adverse parties who...