Why Trump’s $1.8 Billion IRS Settlement Could Actually Cost Him Money

BreakingBusinessWhy Trump’s $1.8 Billion IRS Settlement Could Actually Cost Him MoneyByAlison Durkee,Forbes Staff. Alison is a senior news reporter covering US politics and legal news.Follow AuthorMay 18, 2026, 04:06pm EDT--:-- / --:--This voice experience is generated by AI. Learn more.This voice experience is generated by AI. Learn more.ToplineThe Trump administration is creating a $1.8 billion fund to compensate people who claim to have been “victims” of unfair prosecution, a condition of President Donald Trump settling his $10 billion lawsuit against the IRS, but a legal fight over the fund’s legality could still be looming—unless Trump is willing to pay taxes on the hefty fund himself.President Donald Trump boards Air Force One on May 15 at Beijing Capital International Airport in Beijing.Copyright 2026 The Associated Press. All rights reservedKey FactsThe Justice Department announced Monday it’s creating a $1.776 billion “anti-weaponization” fund for “victims of lawfare and weaponization,” which is expected to include those convicted for participating in the Jan. 6 riot, as Trump voluntarily dropped his lawsuit against the IRS in exchange for the fund being created.It’s being funded through the DOJ’s Judgment Fund, which is what the federal government uses to pay legal claims and settlements.Trump, his sons and the Trump Organization, also parties in the IRS lawsuit, will not receive any money themselves as part of the settlement, the DOJ said Monday, and reporting suggests Trump will not be able to request a payout himself from the $1.8 billion fund.That could pose a legal issue: The Tax Law Center at New York University Law School noted the Judgment Fund is legally only able to pay people or entities that are direct parties in a lawsuit—which means the people who apply for payouts from the fund, who weren’t parties in the IRS lawsuit, wouldn’t actually be eligible to receive them.One way around that, the Tax Law Center suggests, would be for the $1.8 billion...