President Donald Trump has filed a notice of voluntary dismissal in his $10 billion lawsuit against the IRS and the Department of the Treasury, permanently ending the case. (Trump v. Internal Revenue Service, No. 26-cv-20609, 5/18/2026)
The “self-executing” notice, which terminated the lawsuit the moment it was filed, came just two days before a court-mandated deadline to address whether the court had jurisdiction to hear the case and on the same day that 93 members of Congress filed a brief calling the suit an unconstitutional “collusive” action.
The three-page notice invokes Federal Rule of Civil Procedure 41(a)(1)(A)(i), which allows a plaintiff to unilaterally dismiss a lawsuit if the defendant has not yet served an answer. The filing asserts that because the defendants had not filed an answer, the dismissal is “available as of right, and requires neither leave of Court nor the consent of any party.”
As the dismissal was filed “with prejudice,” the plaintiffs are legally barred from ever refiling the same claim against these defendants, and the notice states each party shall bear its own attorneys’ fees and costs.
Case Timeline
The lawsuit was filed on January 29, 2026, by President Trump, his sons Donald Jr. and Eric, and The Trump Organization. The complaint alleged that the IRS and Treasury willfully failed to safeguard their tax information from unauthorized disclosure by former IRS contractor Charles E. Littlejohn, who was sentenced to five years in prison for leaking tax data to The New York Times and ProPublica. The suit sought at least $10 billion in damages under IRC § 7431, arguing that each view of a news article containing the leaked data constituted a separate, $1,000 statutory violation.
On April 17, the parties filed a joint motion requesting a 90-day pause, citing ongoing settlement discussions. Rather than grant the extension, U.S. District Judge Kathleen M. Williams issued a sua sponte order on April 24 redirecting proceedings to the threshold question of the court’s own jurisdiction, noting the “unique dynamic” of a sitting president suing agencies “subject to his direction.” Citing Trump’s own public remarks about a possible settlement, she ordered briefs from both sides by May 20.
Amici Challenged Validity
The dismissal came on the heels of a pair of amicus briefs that raised significant legal and constitutional challenges to the lawsuit’s continuation.
On the same day as the dismissal, a group of 93 members of the U.S. House of Representatives submitted an amicus brief urging the court to dismiss the case for lack of subject matter jurisdiction. The lawmakers argued that the suit did not present a genuine “case or controversy” as required by Article III of the Constitution, because the plaintiff, President Trump, indeed currently holds executive authority over the defendants.
“The unprecedented posture of this suit fundamentally disregards Article III’s case or controversy requirement and raises the specter of corruption unparalleled in American history,” the brief states. “No controversy can exist when the plaintiff controls the defendant, as President Trump does here.”
And the lawmakers’ brief further argued that the Department of Justice, in engaging in settlement talks, had “abdicated these responsibilities” by failing to raise “obvious, and dispositive, defenses” that it had used in similar cases, including that the claims were barred by the statute of limitations and that the suit named the wrong defendants.
The congressional brief came just days after a separate amicus brief from a panel of court-appointed legal experts reached a similar conclusion. The panel, appointed by the judge to analyze the unique jurisdictional questions, stated that the matter was “unprecedented: A sitting president seeks monetary damages for alleged harm to his personal interests from an executive agency that he controls. That presents significant Article III subject matter jurisdiction concerns.”
The experts, which included former federal judges and Justice Department officials, advised the court that determining jurisdiction required a fact-specific assessment of the relationship between the parties to see if they were truly adverse. They noted that unlike the circumstances in United States v. Nixon, 418 U.S. 683 (1974), where a special prosecutor’s independence was protected by regulation, there was no clear insulation protecting the government’s lawyers from the president’s influence in this case.
AG Orders ‘Anti-Weaponization’ Fund
The dismissal drew criticism from a tax policy advocate and a senior Senate Democrat, both of whom pointed to the same-day release of an order from Acting Attorney General Todd Blanche establishing a fund linked to the settlement agreement that ended the case.
In a same-day order, Blanche directed the U.S. Department of the Treasury to transfer $1,776,000,000 to a designated account for the sole use of a newly created “Anti-Weaponization Fund.” The order states that the fund’s corpus is not tied to the value of the Trump plaintiffs’ claims, but rather “is based on the projected valuation of future claimants’ claims,” indicating the money is intended for individuals other than the named plaintiffs who allege harm by prior government conduct.
The order permits funds to be used for per diems, administrative services, facilities, staff, and travel, with fund members serving as volunteers eligible only for travel expenses. It also specifies that once deposited, “the United States has no liability whatsoever for the protection or safeguarding of those funds.”
Blanche cited the Judgment Fund under 31 U.S.C. § 1304 and the compromise settlement authority under 28 U.S.C. § 2414 as legal bases for the payment, drawing a comparison to Obama-era litigation in which $680 million was paid from the Judgment Fund to establish an administrative claims process for agricultural discrimination claims.
Tax Law Center Policy Director Brandon DeBot said the arrangement amounted to an abuse of the tax system regardless of the legal rationale offered. He said Trump was reportedly using the threat of the lawsuit to draw $1.8 billion from the public “for himself and his political allies for unrelated purposes.”
“It’s a breathtaking abuse of the tax and legal system,” DeBot said, “at the same time courts are finding this administration is violating the taxpayer privacy laws the president is now invoking to seek extraordinary sums of money for his own purposes.” He emphasized the payout should be treated as taxable income.
Senate Finance Committee Ranking Member Ron Wyden (D-OR) issued a statement calling the arrangement the most serious misuse of taxpayer funds by a sitting president. In his statement, Wyden focused specifically on the Anti-Weaponization Fund, including its apparent purpose of compensating third-party claimants for alleged harms unrelated to the IRS data leak claims at the heart of the dismissed lawsuit.
“Regardless of whether Trump filed this lawsuit with a personal payday or a slush fund in mind, he deserves no credit for dropping it,” Wyden said, adding that the fund represented “a stunning act of corruption.” He described it as “a $1.7 billion slush fund for right-wing political violence and subversion” and said that if Trump follows through, “it will be the most brazen theft and abuse of taxpayer dollars by any president in American history.”
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