Trump's lawyers are in talks with the IRS to resolve president's $10B lawsuit

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WASHINGTON (AP) — Lawyers for President Donald Trump are engaged in talks with the IRS to resolve a $10 billion lawsuit the president filed against his own tax collection agency over the leak of his tax information to news outlets between 2018 and 2020.

In a federal court filing Friday, Trump asks a judge to pause the case for 90 days while the two sides work to reach a settlement or resolution.

“This limited pause will neither prejudice the parties nor delay ultimate resolution," the filing says. "Rather, the extension will promote judicial economy and allow the Parties to explore avenues that could narrow or resolve the issues efficiently.”

Tax and ethics experts say the lawsuit raises a plethora of legal and ethical questions, including the propriety of the leader of the executive branch pursuing scorched-earth litigation against the very government he oversees.

Earlier this year, Trump filed a lawsuit in a Florida federal court, alleging that a previous leak of his and the Trump Organization’s confidential 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.”

The president’s sons, Donald Trump Jr. and Eric Trump, are also plaintiffs in the suit.

In 2024, former IRS contractor Charles Edward Littlejohn, of Washington, D.C. — who worked for Booz Allen Hamilton, a defense and national security tech firm — was sentenced to five years in prison after pleading guilty to leaking tax information about President Trump and others to two news outlets between 2018 and 2020.

The outlets were not named in the charging documents, but the description and time frame align with stories about Trump’s tax returns in The New York Times and reporting about wealthy Americans’ taxes in the nonprofit investigative journalism organization ProPublica. The 2020 New York Times report found Trump paid $750 in federal income tax the year he first entered the White House, and no income tax at all some years, thanks to reported colossal losses.

When asked in February how he would handle any potential damages from the case, Trump said, “I think what we’ll do is do something for charity."

“We could make it a substantial amount," he said at the time. "Nobody would care because it’s going to go to numerous very good charities.”

Several ethics watchdog groups have filed friend-of-the-court briefs challenging the president’s lawsuit.

The watchdog group Democracy Forward's February filing states that the case is “extraordinary because the President controls both sides of the litigation, which raises the prospect of collusive litigation tactics," and “the conflicts of interest make it uncertain whether the Department of Justice will zealously defend the public fisc in the same way that it has against other plaintiffs claiming damages for related events.”