President Trump has agreed to dismiss his $10 billion lawsuit against the IRS after striking a sweeping settlement with the federal government that includes a formal apology and the creation of a massive $1.776 billion compensation fund for Americans who believe they were unfairly targeted by federal authorities.
The settlement, finalized Monday, marks one of the most extraordinary legal resolutions tied to Trump’s long-running claims that federal agencies were weaponized against political opponents.
And the fallout could stretch far beyond Trump himself.
Under the agreement, individuals who claim they were improperly targeted by any presidential administration would be eligible to apply for relief through a newly created Justice Department “Anti-Weaponization Fund.” That could include Jan. 6 defendants, political activists, business owners — and even Hunter Biden.
“The point of this isn’t to make every January 6-er a millionaire,” a senior administration official told The New York Post. “The point is to compensate, and to give entitled people back some of their dignity and some of what they lost.”
Trump, Donald Trump Jr., Eric Trump and the Trump Organization are not eligible for compensation from the fund despite being plaintiffs in the lawsuit. Instead, they will receive a formal government apology.
“President Trump is entering into this settlement squarely for the benefit of the American people,” a spokesman for Trump’s legal team said. “He will continue his fight to hold those who wrong America and Americans accountable.”
The agreement also forces Trump to withdraw related claims tied to the FBI’s August 2022 Mar-a-Lago raid and the broader federal investigation into alleged Trump-Russia collusion during the 2016 election cycle.
The settlement came as the administration faced a looming court deadline this week to explain why the IRS case should continue.
The new compensation board will evaluate claims based on several factors, including the strength of the complaint, attorney fees incurred, whether the claimant contributed to the circumstances, and whether any previous relief has already been obtained.
And in a twist likely to ignite fierce political debate, administration officials acknowledged Hunter Biden could theoretically qualify.
Hunter Biden was convicted on federal tax and gun charges before later receiving a pardon from former President Joe Biden. Despite the pardon, Hunter Biden reportedly incurred millions in legal fees that remain unpaid in part.
“I potentially expect it,” one administration official said when asked whether Hunter Biden may apply. “Whether the commissioners will agree with that, and feel like he needs to be compensated, is something we’ll have to see.”
Officials stressed the settlement does not limit applicants based on party affiliation or ideology.
“We didn’t limit it in that way,” the official said. “If Hunter Biden believes that the Department of Justice was used as a weapon against him, he’s allowed to apply.”
The fund will be overseen by a five-member commission appointed by Acting Attorney General Todd Blanche, with one appointment made in consultation with congressional leadership, including Mike Johnson and John Thune.
Board members can issue financial awards, formal apologies, or request additional information from claimants and federal agencies. The president retains the authority to remove commissioners without cause.
More over at The Wall Street Journal:
Trump dropped a lawsuit seeking billions of dollars from the IRS, a move that lays the groundwork for the administration to announce an unusual settlement fund to compensate people who claim they were victimized by the Justice Department. https://t.co/PstHFy3V3M
— The Wall Street Journal (@WSJ) May 18, 2026
