President Donald Trump is moving to voluntarily dismiss a $10 billion lawsuit against the IRS, ending a case that legal experts had called unprecedented and that had put his own administration in the awkward position of defending an agency he oversees.
A Monday court filing said Trump, Donald Trump Jr., Eric Trump and the Trump Organization were seeking to drop the suit before a Wednesday deadline for the administration to explain whether a real case or controversy still existed. U.S. District Judge Kathleen M. Williams had already questioned whether there was any actual dispute for the court to decide.
The filing came five months after Trump and his family filed the case in January against the IRS and the Treasury Department. They alleged the agencies failed to stop a former IRS employee from leaking the Trump family’s tax returns, and the president’s personal lawyers told the court the judge did not need to rule because the plaintiffs were voluntarily dismissing the claims and the administration never answered the complaint.
The move is notable because the case was never an ordinary damages suit. Outside legal experts said, “This case is unprecedented: A sitting president seeks monetary damages for alleged harm to his personal interests from an executive agency that he controls. That presents significant Article III subject matter jurisdiction concerns,” a description that captured the basic constitutional problem at the center of the case.
The same experts also said, “The Court might ask why DOJ’s approach to litigating this case appears to depart from its approach in similar cases, as well as what steps Defendants are taking to ensure that settlement discussions are conducted at arm’s length and without risk of collusion,” underscoring the unusual overlap between the president’s personal interests and the government’s legal role.
ABC News reported that Trump was expected to drop the suit in exchange for the creation of a $1.7 billion fund made up of taxpayer dollars. That reported fund would be used to compensate the president’s allies who have argued they were wrongly targeted by previous administrations, including people charged in the Jan. 6, 2021 riot at the Capitol. NBC News said it had not independently confirmed the ABC News report, and there was no mention of any fund in the court documents filed Monday.
That gap matters. If the case disappears on its own, the court may never reach the broader issue that has shadowed it from the start: whether a sitting president can seek damages from the very executive branch he controls. For now, Trump appears ready to walk away from a lawsuit that was always likely to be tested less on the facts of the leak than on whether the courtroom was the right place for it at all.
