President Donald Trump and his co-plaintiffs have moved to dismiss a $10 billion lawsuit against the Internal Revenue Service (IRS), a decision that clears the path for a Justice Department (DOJ) settlement establishing a $1.776 billion fund tied to claims of alleged federal “weaponization,” according to court filings and official statements.
Following the dismissal, the DOJ announced the creation of what it is calling an “Anti-Weaponization Fund,” which officials say will provide a formal process for individuals who claim they were improperly targeted by federal authorities to seek review and potential compensation.
The development stems from litigation brought by Trump, Donald Trump Jr., Eric Trump, and the Trump Organization over the unauthorized disclosure of private tax information by former IRS contractor Charles Littlejohn.
Littlejohn pleaded guilty to illegally accessing and leaking thousands of tax returns, including those belonging to Trump and other high-profile individuals, to media outlets in 2019 and 2020.
Trump’s legal team had argued the IRS failed to adequately safeguard sensitive taxpayer data, allowing what they described as one of the most significant privacy breaches in recent federal history.
The claims formed the basis of the now-dismissed civil case, which had also included broader allegations of federal misconduct.
Under the settlement framework, the DOJ said the new fund will be used to evaluate claims of alleged improper government targeting.
Officials described it as a centralized mechanism for reviewing complaints tied to federal investigative or enforcement actions, NBC News reported.
The fund is set at $1.776 billion, a figure officials say reflects projected claim volume and administrative planning assumptions.
A five-member commission will oversee the program, with members appointed through the attorney general’s office and at least one selected in consultation with congressional leadership.
The structure also gives the attorney general broad authority over appointments and administration.
Acting Attorney General Todd Blanche, who previously served as Trump’s defense attorney, said the initiative is intended to address concerns that federal power has been misused for political or ideological targeting.
According to ABC News, DOJ officials said the goal is to establish a formal claims process rather than rely on traditional litigation against the government.
The fund is expected to accept claims through December 15, 2028, and could include individuals who allege they were subject to federal investigative actions they consider improper or politically motivated.
Officials have not yet finalized the full scope of eligibility criteria.
The announcement adds a new layer to ongoing political disputes over federal investigative practices in recent years, including scrutiny of the IRS leak case, the Mar-a-Lago search, and the broader Trump–Russia investigation, all of which have faced criticism from Republican lawmakers.
Republican allies have long argued that federal institutions have been used in politically driven investigations, pointing to the IRS leak as a major example of government failure to protect sensitive data and taxpayer privacy.
Democrats, however, sharply criticized the settlement structure, with some describing it as an improper use of federal resources, USA Today reported.
Rep. Jamie Raskin (D-MD) and other lawmakers have questioned whether the framework could allow taxpayer funds to be directed toward politically connected individuals or groups and have moved to challenge aspects of the agreement in court.
The DOJ defended the agreement, saying it is designed to restore trust in federal institutions and ensure that allegations of government misconduct can be reviewed through a structured, transparent process.
As of Monday, the commission overseeing the fund has not yet been formally appointed, and additional implementation details are expected to be released in the coming weeks.
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