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The Department of Justice (DOJ) is reportedly holding internal discussions to determine whether to settle a lawsuit filed by President Donald Trump and his family members against the Internal Revenue Service (IRS) — an outcome that would represent a major conflict of interest, given that Trump oversees the departments and agencies involved.
Such a settlement could allow Trump and his family to personally receive millions of dollars in taxpayer funds.
Trump, his two sons Eric and Donald Jr., and the Trump Organization filed the lawsuit in January, alleging the IRS didn’t do enough to prevent the release of their tax records years ago. The family is seeking a $10 billion monetary judgment from the federal government.
Due to the IRS being under the purview of the executive branch, and thus the president himself, federal Judge Kathleen Williams, who is overseeing the case, has taken extra steps designed to determine whether the Trumps and the IRS are legitimately on opposing sides. Both parties must file briefs to Williams’s court before May 20.
However, if a legal settlement is reached before the case proceeds, Williams would be mostly powerless to prevent the Trumps from receiving whatever amount is agreed upon.
The DOJ — which, despite acting independently in the past, has followed through on direct orders from Trump, including pursuing criminal cases against his political opponents — could determine that a settlement is warranted, giving Trump all or some of the monetary judgment he is seeking. Beyond a monetary settlement, the Trumps could also receive perks from the IRS as part of the DOJ determining they should settle, including a promise that the agency will no longer audit the president and his family for a set number of years. (By law, presidents are audited every year by the agency.)
A determination by the DOJ to settle a judgment on behalf of a sitting president would be unprecedented. A settlement would likely be viewed by many legal experts as an extreme conflict of interest and as a precedent for future presidents to obtain millions of taxpayer dollars using frivolous lawsuits.
Despite these concerns, conservative lawmakers have sought to distance themselves from the controversy. When asked by reporters on Tuesday whether Congress would allow a settlement to occur, Speaker of the House Mike Johnson (R-Louisiana) brushed off the query, claiming it was outside of his control.
“One of the things that is not in my purview is the Department of Justice, okay? I haven’t thought about that or read into it,” Johnson said.
“Go ask the executive branch about it,” Johnson added.
The answer from Johnson is remarkable, given that Congress has historically overseen aspects of the DOJ, and has provided oversight on executive actions that could be deemed abuses of power.
Democratic lawmakers decried the possibility of Trump’s lawsuit being settled.
“Trump is trying to circumvent” regular legal process norms “by getting his Justice Department to settle before the court can take any action,” Sen. Adam Schiff (D-California) said in a video statement. “He wants the IRS, the Justice Department, and the U.S. Treasury — your tax dollars — to pay him potentially millions or hundreds of millions of dollars, without the court being able to intervene.”
“It’s the latest Trump corrupt scheme to take money out of your pockets and put [it] into his,” Schiff added.
“[Trump] is a man who went years without paying federal income taxes, yet now wants billions more while hardworking Americans struggle to make ends meet,” Sen. Ben Ray Luján (D-New Mexico) said on X. The senator encouraged the passage of legislation that would forbid sitting presidents from filing lawsuits like Trump’s.
Legal experts and commentators also weighed in on the matter.
“Trump’s own Justice Dept is pondering settling a case with Trump that he filed against his own IRS. Raw grifting. With taxpayers’ money,” said Tim O’Brien, senior executive editor at Bloomberg Opinion.
Trump’s actions are “the very definition of an inside job,” O’Brien also said.
“We need to shout this grift from the rooftops,” said Norm Eisen, senior fellow at the Brookings Institution. “Trump has already raked in billions on the side. Now he wants taxpayers to fund his retribution campaign too.”
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