Trump Drops $10B IRS Lawsuit to Avoid Scrutiny of Corrupt Settlement Deal

A lot of things happened. Here are some of the things. This is TPM’s Morning Memo.

BREAKING …

In a new filing this morning, President Trump attempted an end run around a federal judge by purporting to dismiss his $10 billion lawsuit against the IRS over the leak of his tax returns.

The move comes just days before this week’s deadline set by the judge in the case for Trump and the government defendants to explain how they are truly adverse, rather than all on Trump’s side.

U.S. District Judge Kathleen Williams of Miami had expressed concern that without a true dispute between adverse parties she lacked jurisdiction to hear the case. With no one to argue the other side, she had appointed highly regarded outside attorneys as friends of the court to advise her on the legal issues involved.

Late last week, perhaps anticipating an effort to end-run the judge, they submitted their memo more than a week ahead of their deadline, making a compelling case for why “President Trump enjoys ample actual and practical authority to control the Defendants.”

Trump’s latest filing is a notice of dismissal with prejudice, meaning the case cannot be refiled, but most importantly it contends that the right to dismiss the case is not subject to judicial review under the procedural rules since neither the IRS nor the Treasury Department had yet filed an answer or other responsive motion to the lawsuit.

“Accordingly, voluntary dismissal under Rule 41(a)(1)(A)(i) is available as of right, and requires neither leave of Court nor the consent of any party,” Trump’s lawyers argue. They go farther in a footnote, in telling the judge that they are filing a notice of dismissal, not a motion to dismiss, because she has no say in the matter under appeal court precedent: “dismissal is self-executing, terminates the action upon filing, and divests the district court of jurisdiction.”

The bulk of the notice is dedicated to telling Judge Williams to back off: “Upon the filing of this Notice, no judicial analysis is appropriate, and any ‘subsequent order purporting to dismiss ‘all claims’ . . . [would be] a nullity,’” it contends, citing case law.

The notice also cheekily purports to assess fees and costs: “Each party shall bear its own attorneys’ fees and costs.”

The dismissal comes after significant new reporting over the weekend that built on ABC News’ blockbuster on Thursday that the case was on the verge of being settled through a unprecedentedly corrupt agreement where the U.S. government would set up a $1.7 billion slush fund under Trump’s purview to pay out “damages” to his allies who purport to be victims of the Deep State, including the Trump-pardoned Jan. 6 defendants.

In a followup story, ABC News reported that the exact settlement amount would be the historically resonant figure of 1,776,000,000 to be overseen by the “President Donald J. Trump Truth and Justice Commission.” It would be composed of five commissioners, four of them appointed by the attorney general, all of whom would be subject to removal by Trump without cause. “The commission would also be under no obligation to disclose the process for awarding the nearly $2 billion,” ABC News reported.

In another dark and cynical twist, the Trump DOJ modeled the proposed slush fund “on a landmark $760 million settlement fund the Obama administration created to compensate Native American farmers and ranchers who were deprived access to federal subsidies for decades,” the NYT reported.

It has been apparent for a couple of weeks that Trump officials were racing to settle the IRS case (while bundling two other Trump claims against the government into the settlement agreement) before Judge Williams could weigh in. “A compensation fund for Trump allies but not for the president himself would offer a short-term fix, allowing the president to receive a deliverable benefit from the lawsuit before the judge could dismiss it, according to officials briefed on its details,” the NYT reports.

Now that Trump has dropped his lawsuit, it’s not clear that Judge Williams has any remaining power to probe the terms of the settlement agreement. It’s also not clear-cut who might have standing to challenge the settlement agreement in court.

Rep. Jamie Raskin (D-MD) raised one potential avenue of attack in an interview last week with The New Republic, arguing that the 14th Amendment bars the federal government from assuming any “obligation incurred in aid of insurrection or rebellion against the United States.” 

“Raskin said that if this fund hands money to the January 6 rioters, Trump will be ‘using federal taxpayer dollars to compensate people who participated in insurrection,'” TNR reported.

Jan. 6 Never Ends

I doubt Morning Memo readers need the point driven home for them, but there is a tendency to see some of the developments of the past 72 hours as discrete events rather than as a singular story of a post-coup reckoning that is pushing a revisionist history of Jan. 6, subverting the rule of law, and setting the stage for future attacks on democracy.

The creation of “The President Donald J. Trump Truth and Justice Commission” funnels public funds to former insurrectionists. The GOP primary defeat of incumbent Sen. Bill Cassidy (R-LA) is payback for his voting to impeach President Trump over Jan. 6. The commutation of the sentence of former election official Tina Peters by Colorado Gov. Jared Polis (D) on state charges related to her actions in support of the Big Lie comes after Trump retaliated against the state and threatened further adverse action.

It’s all of a piece, and unfolding in broad daylight.

The Corruption: Trump Stock Trades Edition

A sampling of some of the better coverage of the President Trump’s newly disclosed stock trades from the first quarter of 2026:

• Bloomberg: Trump’s More Than 3,700 Trades Astonish Wall Street Insiders
• Judd Legum: The smoking guns in Trump’s new financial disclosure
• CNBC: Trump touted Palantir on Truth Social after buying the company’s stock, records show

The Great Whitening

• South Carolina: Sitting in special session, the legislature will begin debate this week on eliminating the state’s sole majority-Black House district, held by Rep. James Clyburn (D).
• Virginia: With no noted dissents, the U.S. Supreme Court rejected state Democrats’ long-shot bid to pause the Virginia Supreme Court’s ruling that threw out their voter-approved redistricting plan.
• Tennessee: After state Republicans redrew the congressional district map to eliminate his majority-Black district, longtime Rep. Steve Cohen (D) decided not to run for re-election this year.

Quote of the Day

“People are expecting overt violence and clubs and fire hoses and pitbulls. You don’t need that when you have the current Supreme Court that we have, when you have legislative bodies that do not want Black people to have representation.” —State Sen. Natalie Murdock (D-NC)

ICE Protestors Go on Trial in Spokane

In a closely watched case that prompted the acting U.S. attorney to resign, the Trump DOJ is bringing to trial this week three ICE protestors on unusual conspiracy charges, a move that legal experts says threatens to criminalize political dissent.

Televangelist-in-Chief

Sarah Posner, on Sunday’s nine-hour prayer marathon on The National Mall:

Trump’s evangelical supporters, who falsely contend America was founded by divine providence as a Christian nation, are trying to turn the anniversary of our independence from a king into a spectacle of worship of their wannabe king who compares himself to Jesus Christ. If there was any “rededication” going on at Sunday’s marathon on the Mall, it was not to the divine, but to the grift of Trump as the God-anointed savior of the “real” Christian America.

Trump Ballroom Funding in Jeopardy

The Senate parliamentarian ruled Saturday that funding for Trump’s vanity ballroom as currently written cannot be included in a reconciliation bill, meaning it cannot pass with a simple majority vote. Republicans are working on redrafting the ballroom funding language.

Greenland Talks

The NYT has a grim progress report after four months of talks in D.C. among the United States, Denmark, and Greenland over President Trump’s demands for a greater role on the island territory: “The American demands are so steep, Greenlandic officials fear, that they amount to a major imposition on their sovereignty.”

U.S. Conducts Military Strikes in Nigeria

A joint U.S.-Nigeria operation on Saturday killed a senior ISIS leader. Followup strikes on Sunday killed additional Islamist militants.

WHO Declares Ebola Emergency

On Friday, the World Health Organization announced an ebola outbreak in the Democratic Republic of Congo. By Saturday, it had declared ebola to be a global health emergency, with two cases confirmed in Uganda’s capital, Kampala.

The re-emergence of the ebola threat comes after the Trump administration dismantled USAID, cut funding for the CDC, and withdrew from the WHO — all of which play significant roles in monitoring, containing, and responding to infectious disease outbreaks around the world.

An undetermined number of American citizens on the ground in the DRC have been exposed to suspected cases of the virus. The U.S. government is reportedly arranging transport for them out of the country to be quarantined elsewhere, though where remains unclear.

Most ebola outbreaks are small, but this one has been spreading for weeks, experts say. “The first known case was a nurse who developed symptoms on April 24,” according to the BBC. “It has since taken three weeks to confirm an outbreak is happening.”

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