Trump, IRS Move Toward Settlement Talks in $10 Billion Tax Leak Lawsuit

Lawyers representing Donald Trump and the Internal Revenue Service have entered discussions to potentially settle a $10 billion lawsuit tied to the leak of the president’s tax returns, according to a court filing made Friday in Miami.

Both sides have asked a federal judge to pause proceedings for 90 days to allow time for negotiations aimed at resolving the dispute without prolonged litigation. In their joint request, attorneys said a temporary halt “could narrow or resolve the issues efficiently,” signalling a willingness to explore an out-of-court settlement.

The case stems from the unauthorized disclosure of Trump’s tax records in 2019 and 2020, which were later published by media outlets including The New York Times and ProPublica. Reports at the time indicated that Trump had paid little or no federal income tax in several years, sparking widespread political debate.

At the centre of the controversy is Charles Littlejohn, who was charged in 2023 with leaking confidential tax information belonging not only to Trump but also to thousands of wealthy Americans. Prosecutors said his actions were politically motivated. Littlejohn later pleaded guilty to improper disclosure and was sentenced to five years in prison.

Trump, along with his sons Donald Trump Jr. and Eric Trump, as well as the Trump Organization, claim the leak caused financial damage and harmed their reputations. Their legal team has argued that the IRS failed to safeguard sensitive taxpayer information, allowing what they described as a “rogue” employee to release confidential records.

The case presents a complicated legal situation, as the Department of Justice—which represents the IRS—ultimately reports to the president, raising questions about potential conflicts of interest. A pause in proceedings would give government lawyers additional time to address those concerns.

Neither the White House nor the Justice Department has publicly commented on the settlement talks.

If an agreement is reached, any financial payout could involve public funds. Trump has previously stated that he would donate any damages awarded to charity.

The lawsuit is one of several high-value legal actions Trump has pursued in recent years. He has also filed claims against major media organizations, including a $15 billion case against Penguin Random House and The New York Times, and a separate $10 billion lawsuit against BBC.

Earlier this week, a judge dismissed another $10 billion lawsuit Trump had filed against The Wall Street Journal, though he has indicated plans to refile the case before the court’s deadline.

The outcome of the IRS lawsuit could have significant implications for taxpayer privacy protections and the legal boundaries surrounding the handling of confidential financial data.