Trump’s lawyers in talks with IRS to resolve his $10B lawsuit

Lawyers for President Donald Trump are in settlement talks with the Internal Revenue Service regarding a $10 billion lawsuit he filed against the agency over leaked tax information, according to court documents filed Friday.

The legal team has requested a federal judge pause the case for 90 days to allow negotiations that could potentially resolve or narrow the issues in the lawsuit. “This limited pause will neither prejudice the parties nor delay ultimate resolution,” Trump’s attorneys wrote in the filing. “Rather, the extension will promote judicial economy and allow the Parties to explore avenues that could narrow or resolve the issues efficiently.”

The lawsuit, filed earlier this year in Florida federal court, claims that the unauthorized disclosure of Trump’s and the Trump Organization’s confidential tax records caused significant damage to the president and his business interests. Trump alleges “reputational and financial harm, public embarrassment, unfairly tarnished business reputations, portrayed them in a false light, and negatively affected President Trump, and the other Plaintiffs’ public standing.”

The president’s sons, Donald Trump Jr. and Eric Trump, are also named as plaintiffs in the case.

The legal action stems from leaks that occurred between 2018 and 2020 when former IRS contractor Charles Edward Littlejohn disclosed Trump’s tax information to media outlets. Littlejohn, who worked for defense and national security firm Booz Allen Hamilton, was sentenced to five years in prison earlier this year after pleading guilty to the unauthorized disclosures.

While the court documents don’t specifically name the media organizations that received the information, the timeline and description align with reporting published by The New York Times and ProPublica. The Times’ 2020 investigation revealed that Trump paid just $750 in federal income tax during his first year in the White House and paid no income tax at all in some years, attributing this to substantial business losses.

The lawsuit has raised significant ethical and legal questions from government watchdog groups and tax experts. They point to the unusual nature of a sitting president pursuing litigation against a federal agency that falls under his own executive branch authority.

Several ethics organizations have filed amicus briefs challenging the president’s lawsuit. Democracy Forward, a government watchdog group, argued in a February filing that the case presents extraordinary circumstances where “the President controls both sides of the litigation, which raises the prospect of collusive litigation tactics.”

The group further expressed concern that “the conflicts of interest make it uncertain whether the Department of Justice will zealously defend the public fisc in the same way that it has against other plaintiffs claiming damages for related events.”

When asked about the lawsuit in February, Trump suggested he would direct any potential damages toward charitable causes. “I think what we’ll do is do something for charity,” he said at the time. “We could make it a substantial amount. Nobody would care because it’s going to go to numerous very good charities.”

The $10 billion lawsuit represents one of the largest legal actions ever pursued against the federal government by a sitting president. It comes amid ongoing scrutiny of Trump’s financial affairs and tax practices that have been a subject of controversy throughout his presidency.

The court has not yet ruled on the request for the 90-day pause. If granted, both parties would have until early 2025 to reach a settlement or prepare to proceed with litigation. The outcome could have significant implications for government transparency, taxpayer privacy, and the relationship between the presidency and federal agencies.