Trump, IRS Seek Pause as $10 Billion Tax Leak Lawsuit Heads Toward Potential Settlement

By Blessing Nweke

Attorneys for Donald Trump and the Internal Revenue Service told a federal court Friday that they are in active discussions to resolve a $10 billion lawsuit stemming from the leak of sensitive tax records tied to the president, his family, and his business empire.

In a joint filing, both sides requested a 90-day pause in proceedings, saying they intend to pursue negotiations aimed at avoiding prolonged litigation. The lawsuit accuses the IRS of failing to safeguard confidential taxpayer information, allowing a contractor to unlawfully disclose Trump’s financial records to media outlets.

That contractor, Charles Littlejohn, pleaded guilty and was sentenced in 2024 to five years in prison. He admitted to leaking not only Trump’s tax data but also records belonging to thousands of high-profile individuals, including Jeff Bezos and Elon Musk. The IRS previously condemned the breach as “unacceptable.”

The agency has not commented publicly on the status of the settlement discussions. Trump’s lawsuit, filed in his personal capacity, also names his sons, Donald Trump Jr. and Eric Trump, along with the Trump Organization, as plaintiffs. The complaint alleges significant reputational damage and financial harm, citing media coverage that reported he paid just $750 in federal income taxes in 2016 and 2017.

Meanwhile, political fallout continues. Democratic lawmakers introduced legislation this week seeking to bar sitting presidents and their families from receiving settlement payments from the federal government. One sponsor, Elizabeth Warren, said the bill would prevent what she described as potential abuse of power.

Trump has said any settlement funds would be donated to charity, though critics note the money would originate from taxpayer funds.