Of all President Donald Trump’s kleptocracy schemes, perhaps the most shameless are his financial legal claims against the same executive branch over which he presides. Now Trump is on the verge of settling one of these, a lawsuit he filed in January against the Internal Revenue Service seeking $10 billion in damages for the leak of his tax returns to The New York Times. With negotiators working both sides of the table, Trump is nearing a very generous agreement, which is to say a shameless fleecing of the American taxpayer.
Before proceeding, let’s catalog Trump’s three personal financial claims against his own administration.
The first two are administrative claims under the 1946 Federal Tort Claims Act that Trump filed with the Justice department after his first term ended. An administrative claim is not a lawsuit against the government; it’s an attempt to extract financial compensation from the government under threat of litigation.
Trump’s first administrative claim, filed in 2023, concerned the Federal Bureau of Investigation’s supposed tortuous conduct in its Russiagate probe. Trump’s second administrative claim, filed in 2024, concerned the FBI’s supposed tortuous conduct in its Mar-a-Lago document search. Trump sought $115 million for each of these claims—$230 milliion total—to cover compensatory and punitive damages. He continued to pursue them after he re-entered the White House in January 2025, even though he was now negotiating with his own Justice department. Neither claim is yet resolved.
Trump’s IRS lawsuit differed from these by interposing, inconveniently, a party who is independent from Trump—namely, a district court judge. The judge, Kathleen M. Williams, was elevated to the bench under President Barack Obama, but it’s hard to see how even a Trump-appointed hack could view favorably a president suing his own Justice department (unless, of course, that judge sat on the Supreme Court). On April 24, Judge Williams pointed out that “although President Trump avers that he is bringing this lawsuit in his personal capacity, he is the sitting president and his named adversaries are entities whose decisions are subject to his direction.” She therefore ordered both the Justice department and Trump to produce by May 20 memoranda addressing “the issue of whether a case and controversy exists in this matter.”
I can’t imagine that either party is eager to write such a memorandum. Instead, the race is on to settle before May 20. And whaddya know, the parties turn out not to be very far apart, even though Trump’s case would be weak even if he weren’t president. (More on that here.)
According to Andrew Duehren and Alan Feuer of The New York Times, a settlement is in the works that would drop any IRS audits of Trump, his family, or his businesses. One advantage to this approach is that it would spare Trump having to pretend he’ll donate the proceeds to charity. Since nobody knows what the penalties from such audits would be, nobody can pinpoint such a settlement’s monetary value. On the other hand: Do any such audits still exist, and, if they do, is there any chance they’ll be resolved during Trump’s presidency? Even if the answer to the first part of that question is “yes,” the answer to the second part is surely “no.” So perhaps what Trump’s lawyers seek instead is some sort of indemnification against future IRS action akin to the blanket immunity the Supreme Court gifted him in 2024.
If any adversarial relationship exists in this lawsuit at all, it’s probably between Trump and his own lawyers, because he has a well-documented tendency either to fire them or to refuse them payment. Given such tensions, I’d guess the two unnamed sources who described this possible settlement to the Times were floating it as a trial balloon, not to the public, but to Trump himself. Will Trump go for a settlement in which no money changes hands? Very possibly not; he really likes money. It would be very like Trump to grouse that his Justice department settled Russiagate lawsuits from Carter Page and Michael Flynn, each for sums reportedly in excess of $1 million, but that the IRS wouldn’t do the same for him. And I’m the biggest victim of all!
On the other hand: The IRS were to audit Trump’s tax returns rigorously, the likelihood is he would end up owing quite a lot. In 2024 the Times calculated that just one of Trump’s apparent violations would, if he were held accountable, cost him a penalty in excess of $100 million.
If Trump agreed to settle, could Judge Williams block the settlement? Judges do occasionally invalidate court settlements, and there would be excellent reason to do so in this case. But what’s Judge Williams’s next move? If she throws out the lawsuit, or if Trump voluntarily withdraws it, it’s not clear anything can stop the IRS from settling with Trump at that point, except possibly another lawsuit brought on behalf of taxpayers arguing that Trump’s in violation of the Constitution’s emoluments clauses.
But as I’ve complained before, nobody seems to want to file emoluments clause lawsuits against Trump these days. That’s because, when Citizens for Responsibility and Ethics in Washington tried that during Trump’s first term (over crimes that now seem quaint), the Supreme Court sat on the case until Trump left office so it could declare the issue moot.
When Richard Nixon resigned from the presidency in 1974 rather than face likely impeachment over his Watergate crimes, everybody said “the system worked.” The trouble with Trump’s presidency, which entails much worse crimes, is that the system doesn’t work, or anyway isn’t working now. Which leave people like me little to say except: Mayday! I repeat. Mayday!
