May 18 settlement ends Trump's tax-leak suit with $1.776 billion 'Anti-Weaponization' fund, no direct payment

The Justice Department says it has settled President Donald Trump’s civil lawsuit over leaked tax records with terms that do not pay Trump or his family directly, but do create a new $1.776 billion federal claims program for alleged victims of government “Lawfare and/or Weaponization” and include unusually broad language that appears to reach certain IRS examinations and other claims tied to matters that could have been raised as of May 18, 2026.

The department announced the settlement May 18 and posted the written agreement on its website in the case identified in DOJ materials as Trump v. IRS in the U.S. District Court for the Southern District of Florida. The agreement covers Trump, Donald Trump Jr., Eric Trump and The Trump Organization, LLC. It says the plaintiffs “will not receive any monetary payment or damages of any kind,” but will receive a formal apology.

Instead, the settlement creates what it calls an Anti-Weaponization Fund, capitalized with $1.776 billion from the federal Judgment Fund, a permanent Treasury appropriation typically used to pay certain court judgments and settlements. Under the agreement, the fund may provide formal apologies and monetary relief to people who claim they were victims of “Lawfare and/or Weaponization.”

The fund is to be run by five members appointed by the attorney general, with one selected in consultation with congressional leadership. Three members make a quorum. Members serve until the fund ends, and the president may remove them. The settlement says the fund will set its own claims procedures and that claimants who accept relief may be required to waive other forms of relief.

The agreement sets a deadline of Dec. 1, 2028, for the fund to stop processing claims. Any money left after Dec. 15, 2028, must be transferred before Jan. 1, 2029, to an account designated by the president. The fund also must send quarterly confidential reports to the attorney general identifying claimants and the nature of relief granted.

The settlement is also notable for the breadth of its release language. It says the plaintiffs “RELEASE, WAIVE, ACQUIT, and FOREVER DISCHARGE” claims against the government tied to the case and pending agency claims. But it also says the United States is “FOREVER BARRED and PRECLUDED” from pursuing claims that, as of the effective date, “have been or could have been asserted” in the lawsuit or administrative claims resolved by the deal.

An accompanying order issued May 19 by Acting Attorney General Todd Blanche, which the settlement incorporates, adds to the scrutiny. Blanche, who previously served as one of Trump’s personal criminal defense attorneys, used language that DOJ materials say extends to “examinations or similar or related reviews” and to matters currently pending or that could be pending, “including tax returns filed before the Effective Date.”

That language matters because the IRS’ authority to examine tax returns and compel information ordinarily comes from federal statute, including 26 U.S.C. Section 7602, rather than from a settlement negotiated by Justice Department lawyers. The agreement appears to have been carried out through a party dismissal under Rule 41 of the Federal Rules of Civil Procedure, a mechanism that generally allows parties to end a case without requiring a judge to substantively approve the terms.

The settlement is dated and effective May 18, 2026. It directs the plaintiffs to dismiss the case with prejudice, meaning it cannot be refiled, by May 18 and to withdraw pending administrative claims by June 15.

The lawsuit itself was filed Jan. 29, 2026, after the government had already prosecuted former IRS contractor Charles Edward Littlejohn for unlawfully accessing and disclosing tax return information. According to DOJ materials, Trump and the other plaintiffs sued the IRS and Treasury Department over that disclosure. Littlejohn pleaded guilty and was sentenced in January 2024 to five years in prison for unauthorized disclosure of tax return information.

The new settlement drew immediate scrutiny from Democratic lawmakers and watchdog groups, who called it unprecedented and said they would pursue oversight. Two concrete legal questions have been flagged by commentators and critics reviewing the DOJ documents.

One is whether an attorney general can, through settlement terms and an implementing order, restrict the IRS’ statutory examination authority. The other is whether the Judgment Fund can lawfully be used for a large discretionary claims program of this kind, rather than simply paying a negotiated settlement amount to the named plaintiffs. While federal claims funds have existed before in other contexts, the Judgment Fund’s use here has drawn particular attention because the agreement empowers the new body to design its own process, distribute money to outside claimants and send confidential reports to the attorney general.

For now, the key point in DOJ’s own papers is straightforward: Trump’s tax-leak lawsuit has been resolved without a direct payout to Trump or his family, but with a multibillion-dollar fund and settlement language whose scope — especially as to pre-May 18 matters and possible IRS reviews — is already prompting legal and congressional scrutiny.