Trump and IRS Engage in Negotiations to Settle $10 Billion Tax Records Lawsuit

On Friday, legal representatives for Donald Trump and the Internal Revenue Service informed a federal court of ongoing negotiations to settle a staggering $10 billion lawsuit concerning leaked tax records involving Trump, his adult sons, and his business.

In a collaborative court filing, both parties requested a 90-day suspension of legal proceedings to facilitate discussions aimed at resolving the issue and avoiding lengthy litigation.

This lawsuit, initiated by Trump against the IRS and the Treasury Department, alleges that the agency failed to adequately protect his tax documents from unauthorized disclosure by a government contractor. This contractor, Charles Littlejohn, pleaded guilty and received a five-year prison sentence in 2024.

Littlejohn confessed in court to stealing tax records from numerous affluent individuals, including notable figures like Jeff Bezos and Elon Musk, during 2019 and 2020.

In response to the breach, the IRS condemned Littlejohn’s actions as “unacceptable” in 2024.

As of Friday evening, the IRS had not provided any updates regarding the status of settlement discussions with Trump’s legal team.

Notably, the lawsuit specifies that Trump is pursuing this case in his personal capacity rather than as president. It also includes his sons, Donald Trump Jr. and Eric Trump, along with the Trump Organization as plaintiffs. The complaint highlights claims of “reputational and financial harm” alongside “public embarrassment” stemming from the leak, which led to revelations by The New York Times that Trump paid only $750 in federal income taxes for the years 2016 and 2017.

This week, Democratic lawmakers introduced legislation aimed at prohibiting the president, vice president, and their families from receiving settlement payments from the government.

Senator Elizabeth Warren, D-Mass., one of the bill's sponsors, stated that the legislation “will close the loopholes that enable this apparent corruption and ban Trump — and all future Presidents and Vice Presidents — from abusing their power and stealing Americans’ hard-earned money.”

While Trump has expressed intentions to donate any funds received from the IRS lawsuit to charity, it is important to note that such funds would ultimately be sourced from U.S. taxpayers.