President Donald Trump, his two eldest sons, and the Trump Organization officially dismissed a $10 billion lawsuit against the Internal Revenue Service (IRS) in a Miami federal court filing. The dismissal came after the Department of Justice (DOJ) agreed to establish a $1.776 billion fund designed to compensate individuals who claim they have been targeted by what the DOJ calls “lawfare.”

The lawsuit, which was filed in late January over the alleged leak of Trump’s tax returns by a former IRS employee, had been a central grievance for the Trump camp. In the settlement, the plaintiffs also agreed to withdraw two administrative claims, including those related to damages from a police raid at Mar‑a‑Lago and the so‑called Russia‑collusion investigations. The DOJ announced that the new “Anti‑Weaponization Fund” would be drawn from its perpetual judgment fund and would issue formal apologies and monetary relief to eligible claimants.

The court filing noted that the dismissal was made “with prejudice,” meaning the plaintiffs cannot refile the same claims in the future. The move was timed just before a deadline set by Judge Kathleen Williams, who had asked whether a case and controversy existed that would give the court jurisdiction. By dismissing the suit, the Trump team effectively precluded any judicial review of the lawsuit’s merits.

The settlement has drawn sharp criticism from Democrats. Senators Elizabeth Warren and Ron Wyden described the fund as a “slush fund” that would benefit right‑wing allies and called the arrangement a form of corruption. The DOJ, however, emphasized that the fund would serve victims of politically motivated legal actions and that it would cease processing claims by December 15, 2028.

The IRS has not yet responded to requests for comment on the agreement.