Trump’s $26 Billion Fund: A Controversial Move Against IRS Tax Record Leaks?

Translation result.President Donald J. Trump has agreed to withdraw a slate of lawsuits he filed in January over leaked tax returns in exchange for establishing a taxpayer-funded compensation fund of roughly 2.6 trillion KRW (about $1.95 billion) for allies, including some charged in the January 6 Capitol attack. The deal and the proposed fund have provoked sharp criticism across the United States as critics say it effectively uses public money to reward political supporters.According to Reuters, The Washington Post and other U.S. outlets, Trump will abandon a 15 trillion KRW (about $11.25 billion) suit he filed against the IRS and the Treasury in January, arguing those agencies should be held responsible for media reports based on the leaked returns. The New York Times reported that the leaked records showed Trump paid just 1.14 million KRW (about $855) in federal income tax in 2016 and 2017 and paid no federal income tax in 10 of the prior 15 years—coverage that produced major political fallout. The person who removed the tax records and delivered them to news organizations was sentenced in 2024 to five years in prison.Trump also agreed to drop related suits tied to the FBI’s 2022 search of his Mar-a-Lago estate and to suits connected to federal investigations into possible Russian interference in the 2016 election.Under the settlement, the compensation fund—financed with taxpayer money—would provide payments to people Trump says were the targets of politically motivated prosecutions under the Biden administration. Eligible recipients would include aides and supporters who claim they were prosecuted for political reasons; The Washington Post reported that the roughly 1,600 people charged in the Capitol attack could be included. A government official said the president and his family would not receive any payments.Legal experts and advocacy groups immediately condemned the plan as improper and corrupt. They argued the deal permits the head of the executive branch to leverage the Justice Department to benefit his political allies. Donald K. Sherman, director of Citizens for Responsibility and Ethics in Washington, called it “one of the most corrupt acts in American history,” saying the IRS and Treasury ultimately answer to the president. Senate Majority Leader Chuck Schumer said, “This is not justice,” and warned that no president should transform the Justice Department into a personal compensation program for those who aided attacks on democracy.Critics also pointed to weaknesses in the fund’s oversight. A copy of the settlement released by the Justice Department says a five-member committee appointed by the attorney general would determine payments, but the president would have the power to replace committee members. The agreement requires quarterly reporting and audits to the Justice Department, yet allows those records to remain sealed.Observers noted the arrangement appears hypocritical given Trump’s history of exerting political and legal pressure on opponents. Analysts also suggested Trump’s recent firing of Attorney General Pam Bondi reflected his dissatisfaction that she had not pursued disclosure of records related to Jeffrey Epstein aggressively enough or shown sufficient zeal in pursuing investigations of his political adversaries.