President Donald Trump’s lawyers are in talks with the Internal Revenue Service to resolve a $10 billion lawsuit the president filed against his own tax collection agency. In a Friday federal court filing, Trump’s legal team asked a judge to pause the case for 90 days while the two sides explore settlement options. The lawsuit stems from the leak of Trump’s confidential tax records to news outlets between 2018 and 2020.
Tax and ethics experts say the lawsuit raises questions about the propriety of a president pursuing litigation against his own government. Watchdog groups have cited conflicts of interest in the arrangement.
Settlement Negotiations
Trump’s lawyers told the court that settling the case would “promote judicial economy and allow the Parties to explore avenues that could narrow or resolve the issues efficiently,” according to the Friday filing.
The Leaked Tax Records
The lawsuit was filed in Florida federal court after the leak. Trump alleged that the disclosed tax records caused “reputational and financial harm, public embarrassment, unfairly tarnished their business reputations, portrayed them in a false light, and negatively affected President Trump, and the other Plaintiffs’ public standing.” His sons, Donald Trump Jr. and Eric Trump, are also named as plaintiffs.
The leaked information surfaced publicly through reporting by The New York Times and the nonprofit investigative journalism organization ProPublica. A 2020 New York Times investigation found that Trump paid $750 in federal income tax the year he first entered the White House. The same reporting documented that Trump paid no federal income tax in some years, attributing this to reported substantial business losses.
Charles Edward Littlejohn, a former IRS contractor from Washington who worked for Booz Allen Hamilton, a defense and national security technology firm, pleaded guilty to the leak. In 2024, he was sentenced to five years in prison.
Ethics and Watchdog Concerns
When asked in February how he would handle any potential damages from the lawsuit, Trump said, “I think what we’ll do is do something for charity. We could make it a substantial amount. Nobody would care because it’s going to go to numerous very good charities.”
Several ethics watchdog groups have filed friend-of-the-court briefs opposing the lawsuit. Democracy Forward’s February filing states that the case is “extraordinary because the President controls both sides of the litigation, which raises the prospect of collusive litigation tactics,” and expresses 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.”