President Trump has moved to dismiss the $10 billion lawsuit he and the Trump Organization filed against the IRS and Treasury over the leak of his tax returns, according to a court filing. The decision could open the door to a settlement between Trump and the federal government, even as ethics watchdogs and some Democrats seek to intervene.
The suit, filed in January, sought $10 billion for alleged harm from the disclosure of tax information that occurred between 2018 and 2020. Legal experts have long viewed the case as tenuous: the leak has been traced to a federal contractor, not a career government employee, and that contractor is now serving prison time. Observers also raised questions about whether the statute of limitations may have expired.
The Justice Department recently told the court it is negotiating to resolve the dispute, a development that could result in the government — which Trump leads as president — paying him personally. U.S. District Judge Kathleen Williams of Miami has signaled concern about the unusual posture of the case, noting that although Trump says he brings the suit in a personal capacity, he is also the sitting president and the named defendants are agencies whose decisions he oversees. As the judge put it, ‘it is unclear to this Court whether the Parties are sufficiently adverse to each other so as to satisfy Article III’s case or controversy requirement.’
There is an established process at the Justice Department for evaluating claims against the federal government, typically overseen by career lawyers and used for routine matters such as traffic accidents or slip-and-fall incidents in federal buildings. Former Justice Department lawyer Rupa Bhattacharyya noted that even in serious, high-profile cases the payouts rarely approach sums like $10 billion, and historically awards have been far smaller.
Prominent conservative lawyer Edward Whelan suggested pausing the litigation until Trump leaves office, arguing there is a clear conflict of interest with the president effectively on both sides of the claim. The court will now consider the dismissal motion and any further steps toward a negotiated resolution.