President Trump dismissed his $10 billion lawsuit against the IRS on Monday as part of a settlement that includes a formal government apology and the creation of a $1.776 billion fund to compensate Americans who believe they were unfairly targeted by federal power, a fund so broadly drawn that even Hunter Biden could apply.
The deal, reported by the New York Post, resolves the suit Trump, Don Jr., Eric Trump, and the Trump Organization filed on January 29 against the IRS and Treasury Department. That case charged the government with failing to protect their confidential tax returns, which were leaked to the New York Times in 2019 by IRS contractor Chaz Littlejohn. Littlejohn pleaded guilty to one count of unauthorized disclosure and was sentenced to five years in prison in January 2024. He also leaked tax documents of thousands of other wealthy Americans to ProPublica.
The settlement trades a massive damages claim for something potentially more consequential: a Justice Department Anti-Weaponization Fund designed to operate through the end of 2028 and open to any American who believes the federal government came after them for the wrong reasons.
Acting Attorney General Todd Blanche will appoint five board members to oversee the fund. One of those picks will be made in consultation with House Speaker Mike Johnson and Senate Majority Leader John Thune. The president retains the authority to remove board members without cause.
The board can issue apologies and monetary relief to applicants. It can also request additional information from claimants and relevant agencies before making decisions. Claims the board approves will be subject to FOIA laws and federal audits, and must be reported to the attorney general.
The fund sunsets on December 15, 2028. Any money left over reverts to the federal government.
Blanche framed the fund in broad terms. "The machinery of government should never be weaponized against any American, and it is this Department's intention to make right the wrongs that were previously done while ensuring this never happens again," he said in a statement announcing the fund's formation.
Administration officials made clear the fund is not limited to Trump allies or any single political category. People charged in connection with the January 6, 2021 Capitol riot could apply. So could Hunter Biden, who was convicted of federal tax and gun charges before receiving a pardon from his father, former President Joe Biden. The younger Biden accumulated millions in legal fees during his cases.
A senior administration official addressed the January 6 question directly, telling reporters the fund's purpose is not open-ended generosity.
"The point of this isn't to make every January 6-er a millionaire. The point is to compensate, and to give entitled people back some of their dignity and some of what they lost, including money, whether it's for legal fees or other costs associated with what they went through."
On the question of Hunter Biden specifically, an official said the administration deliberately avoided excluding anyone.
"We didn't limit it in that way, because we really viewed it as, and actually this is what the president has said, which is that the Department of Justice was used as a weapon for reasons that are totally wrong, and if Hunter Biden believes that the Department of Justice was used as a weapon against him, he's allowed to apply."
Whether a Biden application would succeed is another matter. "I potentially expect it," one official said of a Hunter Biden filing, before adding: "Whether the commissioners will agree with that, and feel like he needs to be compensated, is something that, I think we'll have to see."
The Justice Department's willingness to entertain claims across political lines stands in contrast to how the previous administration handled its own legal controversies. The Biden-era DOJ pursued cases against Trump and his allies while figures like Jack Smith pressed classified documents investigations that critics called politically motivated from the start.
The settlement required Trump to withdraw claims related to the FBI's August 2022 raid on Mar-a-Lago and the FBI investigation into purported collusion between his 2016 campaign and the Russian government. Those were among the most politically charged episodes of the past decade, and Trump had long cited both as evidence of a weaponized bureaucracy.
The Trump Organization, while a plaintiff in the original lawsuit, is not entitled to compensation from the fund.
A spokesman for Trump's legal team framed the deal as a sacrifice made for the public good. "President Trump is entering into this settlement squarely for the benefit of the American people, and he will continue his fight to hold those who wrong America and Americans accountable," the spokesman said.
Trump himself had set the tone for this kind of action from the beginning of his second term. In his January 2025 inaugural address, he declared: "Never again will the immense power of the state be weaponized to persecute political opponents, something I know something about."
The broader effort to hold former officials accountable has taken other forms as well. The Justice Department's indictment of former FBI Director James Comey earlier this year reflected the same institutional reckoning Trump promised voters.
The $1.776 billion figure is not accidental. It echoes the year of America's founding, and administration officials described the fund's purpose in constitutional terms, restoring rights and dignity to citizens wronged by their own government.
The structure has a loose precedent. In 2010, the Obama administration settled Keepseagle v. Vilsack by establishing a $680 million compensation fund and up to $80 million in farm loan debt forgiveness for Native American farmers who had been discriminated against by the USDA. That fund operated through a similar board-and-application model.
The Anti-Weaponization Fund dwarfs that earlier effort in scale. And its scope is far broader, not limited to a single agency or a single class of victims, but open to anyone who can make a case that the federal government's enforcement apparatus was turned against them unjustly.
An administration official described the design philosophy behind the five-member board. "The whole point of why we're doing this is because weaponization comes in many different forms, and having five commissioners, who kind of bring their own unique perspective to how to remedy it, was really our goal."
The political dynamics around government accountability continue to shape the Republican landscape. GOP voters have shown little patience for members who break with Trump's agenda, and the creation of a fund specifically designed to address the abuses Trump campaigned against reinforces that alignment.
For all its ambition, the fund leaves significant details unresolved. The specific application process, deadlines, and forms have not been announced. How the $1.776 billion will be allocated among categories of claimants, if categories exist at all, remains unclear. Blanche has not yet announced his board appointments.
The exact language of the formal apology to Trump and the other plaintiffs has not been made public. And it is not yet known what standards the board will use to evaluate claims or what dollar amounts individual applicants might receive.
The settlement also raises structural questions. The president's ability to remove board members without cause means the fund's independence depends entirely on the willingness of the executive branch to leave the commissioners alone. Claims are subject to FOIA and federal audit, which provides some transparency, but the board's discretion appears wide.
Trump and the Justice Department had faced a deadline this week to justify why the original $10 billion case should proceed. The settlement mooted that question. Whether the fund proves to be a meaningful remedy or a political gesture will depend on how it operates over the next two and a half years.
The broader question of how courts handle the legal battles surrounding Trump will continue to play out in parallel. But this settlement marks a distinct turn: instead of litigating backward, the administration chose to build a forward-looking mechanism.
The irony that Hunter Biden, pardoned by his own father to escape the consequences of federal prosecution, might now seek compensation from a fund created at the insistence of the man his father's administration spent years investigating tells you everything about what the federal government became. This fund exists because too many people in Washington treated the law as a weapon and accountability as optional. Whether it fixes the problem or just names it, at least someone finally admitted it happened.
