Donald Trump has dropped his $10 billion lawsuit against the IRS in exchange for the Department of Justice creating a $1.776 billion “compensation fund” for his allies – including the January 6 insurrectionists he’s already pardoned.
According to an agreement by the Justice Department, the Attorney General would create a hand-picked panel of five people to oversee the distribution of $1.776 billion of taxpayer money to Trump’s supporters who say they were “targeted” by the Biden Justice Department.
Breaking News: The Justice Dept. announced a $1.8 billion fund to pay President Trump’s allies as part of its settlement with the IRS. Follow live updates. https://t.co/BOXrURoGg7
— The New York Times (@nytimes) May 18, 2026
From the New York Times:
The highly unusual plan — slammed by critics as a political slush fund — came after President Trump withdrew his lawsuit demanding at least $10 billion against the Internal Revenue Service, an apparent effort to skirt oversight by the judge in the case as he moves toward arranging a fund to funnel taxpayer money to his allies and supporters.
The fund, with its symbolic dollar value, is intended “to provide a systematic process to hear and redress claims of others who suffered weaponization and lawfare,” a department spokesman said in statement.
The dismissal and creation of the fund is the latest legal turn in an extraordinary attempt by Mr. Trump to win billions of dollars in damages from a government agency he controls.
Critics say creation of “the fund” demonstrates the administration’s eagerness to reward allies who were investigated – and in some cases charged and convicted – before Trump returned to power.
If distributed equally, it would hand about $1.1 million to each of those folks captured on video assaulting police officers, smashing windows, and running like lunatics through the Capitol Building on January 6, 2021.
Trump didn’t just pardon his followers who stormed the U.S. Capitol.
He’s now set them up for payments through a slush fund he created to reward his allies—out of your tax dollars.
You could not make this up. pic.twitter.com/uf2mRRS8ne
— Hillary Clinton (@HillaryClinton) May 18, 2026
Read the DOJ announcement here. It basically says once the money is transferred into the “fund,” there will be no liability for the “protection,” “safeguarding,” or other “misuse” of the funds.
Here’s a deeper explanation of the “compensation fund.”
Trump sued his own government for $10 billion. Today he settled with the DOJ he runs and cut the judge out of the process.
The deal: a $1.8 billion taxpayer-funded slush fund his Attorney General controls, with no court oversight and no transparency. It’s the most corrupt… pic.twitter.com/XOxcHjAISl
— Mike Levin (@MikeLevin) May 18, 2026
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