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Trump Sued Himself And Walked Away With A $100 Million Tax Debt Erased

Trump Sued Himself And Walked Away With A $100 Million Tax Debt Erased

Failures

from the it's-just-so-brazen dept

Wed, May 20th 2026 01:11pm -

Mike Masnick

There were two rumors last week regarding the supposed "settlement" of Donald Trump’s ridiculously problematic lawsuit against his own IRS, asking for $10 billion. The first was that he was going to get an agreement to drop all audits of his taxes (and the taxes of his family members and businesses). The second was that he was going to create a $1.776 billion fund to pay off January 6th insurrectionists. The first of those came true on Monday. The second came true on Tuesday.

US tax authorities will be barred from pursuing claims against Donald Trump, his eldest sons and the Trump Organization under an agreement to halt the president’s $10bn lawsuit against the Internal Revenue Service.

Just like Monday’s news, the framing of this is absolute bullshit. There is no "agreement to halt the lawsuit." The lawsuit was about to be drop kicked out of court by a judge who pointed out that there is no "cause or controversy" here because Donald Trump was suing himself and had full control over both parties in the lawsuit. You can’t "come to an agreement" with yourself to give yourself a tremendous benefit from the United States government.

That’s not a thing. That’s just theft.

And while it may not be the full $10 billion he sought, it’s still a massive theft from the United States treasury. As you’ll recall, Donald Trump has insisted for years that he couldn’t release his tax returns like every single President since Richard Nixon had done, because they were being audited. But that’s also bullshit. When Nixon released his tax returns, they were being audited. And, indeed, the IRS code requires it to audit both the President and Vice President’s taxes every year.

Reporting from a few years ago found that an audit of Trump’s taxes suggested he owed over $100 million to the US Treasury because of earlier tax fraud.

The issues around Mr. Trump’s case were novel enough that, during his presidency, the I.R.S. undertook a high-level legal review before pursuing it. The Times and ProPublica, in consultation with tax experts, calculated that the revision sought by the I.R.S. would create a new tax bill of more than $100 million, plus interest and potential penalties.

So agreeing to drop the audit entirely is, at minimum, a $100 million gift from the American taxpayer directly to Donald Trump. As a reward for tax fraud.

That seems… very bad. It’s extraordinarily, shockingly corrupt. And it’s probably not even the most corrupt thing he’s done this week.

The actual agreement from the DOJ is hilariously stupid. It’s just three paragraphs long and claims it’s part of the "settlement" of the lawsuit (which, again, cannot be "settled" because there’s only one party). The main part is this:

The United States RELEASES, WAIVES, ACQUITS, and FOREVER DISCHARGES each of the Plaintiffs from, and is hereby FOREVER BARRED and PRECLUDED from prosecuting or pursuing, any and all claims, counterclaims, causes of action, appeals, or requests for any relief, including injunctive relief, monetary relief, damages, examinations or similar or related reviews, appeals, debt relief, costs, attorney’s fees, expenses, and/or interest, whether presently known or unknown, that as of the Effective Date of the Settlement Agreement-have been or could have been asserted by Defendants against any of the Plaintiffs or related or affiliated individuals (including, without limitation, family or others filing jointly), or parties including trusts, parent, sister, or related companies, affiliates, and subsidiaries, by reason of, with respect to, in connection with, or which arise out of (1) any matters that were raised or could have been raised in the Case or the Pending Agency Claims; (2) Lawfare and/or Weaponization; or (3) any matters currently pending or that could be pending (including tax returns filed before the Effective Date) before Defendants or other agencies or departments.

Basically: clean slate for what appears to be many, many years of tax fraud. So he defrauded the American government, then used his role as the President to just wipe out any ability to hold him accountable for it.

And it’s not like everyone inside the government just went along with it. Reporting says that IRS officials were horrified by the lawsuit and pushed the DOJ to fight back against it.

I.R.S. officials prepared a 25-page memorandum outlining what they saw as flaws in Mr. Trump’s suit and advising the Justice Department to move to dismiss it,...