Trump drops $10 billion IRS lawsuit over leaked tax records

President Donald Trump and his family dropped a lawsuit May 18 seeking $10 billion from the IRS for not preventing a contractor from disclosing his tax returns to the media.

The lawsuit was brought by Trump, his two oldest sons, Don Jr. and Eric, and The Trump Organization, which includes many of Trump's businesses, in January. The contractor, Charles Littlejohn, was sentenced in 2024 to five years in prison for disclosing thousands of tax returns, including those of Trump and many other wealthy individuals.

Trump and the other plaintiffs alleged in the lawsuit that the IRS embarrassed them and and "unfairly tarnished" their business reputations by failing to establish appropriate screening and monitoring systems to prevent the release of the information.

Trump moved to drop the lawsuit as officials in his administration are considering creating an approximately $1.7 billion fund to compensate political allies of Trump who say they were wronged by the Justice Department under the Biden administration, according to reports from The New York Times and ABC News.

Those reports have sparked ethics concerns, including that the administration might be acting at the behest of the president to direct taxpayer funds to his allies.

The May 18 court filing dropping the lawsuit didn't describe any settlement or deal underlying the move.