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What was the resolution of President Donald Trumpā€™s lawsuit against the IRS?

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In January 2026 Pres. Donald Trump, his sons, Donald, Jr., and Eric, and the Trump Organization filed a lawsuit alleging that the Internal Revenue Service and the Treasury Department failed to protect the privacy of their tax records when a contractor leaked them to news organizations. The suit sought $10 billion in damages. The suit was controversial: The judge in the case questioned how a plaintiff (the president) could sue agencies that he directs (the IRS and Treasury). Some questioned whether it was constitutional, citing provisions of Article III.

Just days before the judicial briefs on the question were due, a settlement of the lawsuit was announced. It included two key provisions:

  • Creation of a $1.776 billion fund: This so-called ā€œAnti-Weaponization Fundā€ would allow other people adversely affected by government actions to sue the government. This was broadly seen as a way for January 6 rioters to gain financial compensation from the government, something Trump did not deny.
  • Tax immunity for the Trump family: A one-page addendum, signed by acting Attorney General Todd Blanche, said the government was ā€œFOREVER BARRED and PRECLUDED from prosecuting or pursuingā€ current or future tax claims against Donald Trump, Donald Trump, Jr., Eric Trump, the Trump Organization, and a wide array of other family members.

But the settlement drew a stinging rebuke from the judge hearing the case, who said that the filing of the lawsuit was simply a ruse to set up the settlement that ā€œhad no viable basis in law or fact.ā€ It also threatened to derail Blancheā€™s nomination to become attorney general when two Republican senators, John Cornyn of Texas and Thom Tillis of North Carolina, said they would not vote to advance his nomination without written notification that the tax immunity deal was voided.

On August 2, 2026, Blanche issued two documents. One, signed by him, officially rescinded the anti-weaponization fund. The second, unsigned, clarified that only the president, his two sons, and the Trump Organization were immune from IRS scrutiny and only for previously filed returns. Future tax returns could be audited, a provision Cornyn had insisted on. In return, Cornyn and Tillis agreed to support Blanche.