Trump, IRS Enter Settlement Talks Over $10 Billion Tax Returns Lawsuit

Settlement talks are underway between President Donald Trump and the IRS over a $10 billion lawsuit Trump filed against the agency, according to a federal court filing submitted on April 17 in Miami.

Trump’s lawyers asked a U.S. district judge to suspend the case for 90 days to allow negotiations to proceed.

“The Parties are engaging in discussions and need time to work through how to ensure those discussions can take place productively to avoid protracted litigation,” the filing states.

The Department of Justice, which represents the IRS, agreed to the pause.

Trump filed the lawsuit on Jan. 29 in the U.S. District Court for the Southern District of Florida. He is seeking at least $10 billion in damages, alleging federal privacy laws were violated when an IRS worker unlawfully accessed and disclosed massive amounts of his and affiliated entities’ tax return information.

The IRS and Treasury Department are named defendants in the lawsuit, and Donald Trump Jr., Eric Trump, and the Trump Organization are listed as co-plaintiffs.

The complaint argues that the unauthorized disclosure of 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.”

When asked in February how any awarded damages would be handled, 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.”

Democratic lawmakers, including Sen. Elizabeth Warren (D-Mass.), condemned the case.

“While the Internal Revenue Code permits a taxpayer to seek redress for unauthorized disclosures, Congress designed this provision to provide compensation for proven harm—not to confer $10 billion dollar windfalls to a President seeking to line his own pockets at taxpayer expense,” Warren said.

A coalition of former government officials, including former IRS Commissioner John Koskinen, filed a friend-of-the-court brief claiming the suit contains “significant legal flaws” and risks becoming “collusive litigation.”

Former IRS contractor Charles Littlejohn stole Trump’s confidential tax returns and leaked them to The New York Times in 2019. The following year, he funneled data on thousands of other wealthy Americans to ProPublica. Littlejohn, who was employed by defense contractor Booz Allen Hamilton, pleaded guilty in October 2023 to one count of unauthorized disclosure of tax returns and return information.

In January 2024, Littlejohn was sentenced to five years in prison—the maximum under the statute—with U.S. District Judge Ana Reyes calling the crime the “biggest heist” in IRS history. The sentence also included $5,000 in fines and community service.