Written by: Sisto Campana
On January 29, 2026, during his ninth day in office, President Donald Trump, his son Donald Trump Jr., and the Trump Organization filed a complaint against the Internal Revenue Service (IRS) arising from the leak of his tax returns in 2017, seeking $10 billion in damages. At the time of the filing, the IRS was a government agency over which he exercised control as President of the United States.
In his complaint, President Trump alleged two violations of law. His first claim arises from an alleged violation of 26 U.S.C. § 6103, which prohibits officers and employees of the United States from disclosing tax return information. He brings that claim under 26 U.S.C. § 7431(a)(1), which allows a person to sue the United States when an officer or employee knowingly or negligently violates § 6103. His second claim arises under 5 U.S.C. § 552a(e)(10), which requires agencies to establish safeguards to protect records from unauthorized access or disclosure that could result in substantial harm, embarrassment, inconvenience, or unfairness to the person about whom the information is maintained.
The suit raises several constitutional and ethical concerns. First, what does it mean for separation of powers when the President sues an executive branch agency – an agency he oversees and controls to a significant degree? In her April 24, 2026 order, Judge Kathleen Williams questioned whether this is the type of case a federal court can hear at all. Article III of the United States Constitution requires a “case or controversy” before a court may hear a dispute and issue an order binding the parties. Here, Judge Williams questioned whether a true case or controversy exists when the sitting President’s named adversaries are entities whose decisions are subject to his direction. The court requested assistance from law firms, or amici curiae, outside the lawsuit to assess the concerns raised in Judge Williams’s order. In its brief, the amici curiae stated that the court would need to examine the relationship between the parties and what the actual effect would be resulting from a court order.
On the first question, the analysis depended on whether the President has sufficient control over the defendants to determine whether the parties were “truly adverse” – a necessary requirement for a “case or controversy” under Article III. If the parties are not adverse to one another, then no case or controversy can exist. The memorandum also noted that although President Trump sued in his personal capacity rather than his official capacity, that distinction did not change the court’s analysis. However, it recognized that the presence of plaintiffs other than the President could support a finding of adversity, while also identifying several issues in the current lawsuit that may undermine such a finding.
On the second question – the effect of the court’s ruling on the parties – the court must determine whether its decision would have “real meaning.” Put differently, Article III prohibits suits that are merely “friendly,” “feigned,” or “collusive” in nature. However, because the defendants had not yet taken a position or explained whether they intended to defend the case, the memorandum concluded that it was too early to determine whether the court could issue an order with a real, practical effect.
Second, there appears to be a serious conflict-of-interest issue. The President himself has said that he “has to work out a settlement with himself.” That raises the question whether the IRS could have realistically defended the lawsuit vigorously and independently, without undue influence from the President. In any event, these questions will remain largely unanswered because the President settled the case with the government and withdrew the complaint.
However, the settlement itself raises additional questions about its legality and the ethical standards governing the Office of the President. As part of the settlement, the government is “forever barred and precluded from prosecuting or pursuing any and all claims, charges, counterclaims, causes of action, appeals, or requests for any relief . . . that have been or could have been asserted by . . . the Pending Agency Claims.” Does this language preclude the IRS from investigating the President after he leaves office? Does it also bar future investigations involving his son, a private individual, or the Trump Organization, a private company?
The settlement also creates an “Anti-Weaponization Fund,” which allows individuals to petition the fund’s members for monetary payments if the fund determines that they were harmed by “similar Lawfare and Weaponization” to that allegedly experienced by the President and his family. The settlement allows the Attorney General to appoint a five-member board, which would then create the policies governing payouts from the fund. The current Attorney General is Todd Blanche, the President’s former personal attorney, and the Attorney General is removable at will by the President. This raises another question: will the President effectively be able to influence who receives money from the fund?
Clearly, both the lawsuit itself and the creation of the fund raise a host of constitutional and ethical concerns around presidential power and self-dealing in the oval office. The legality of the settlement, how the funds will be used, and the effect it will have on the IRS in the future will surely be hotly contested in the courts.
Sources:
Complaint, Trump v. Internal Revenue Service, No. 1:26-cv-20609-KMW (S.D. Fla. Jan. 29, 2026) Dkt. No. 1.
Order, Trump v. Internal Revenue Service, No. 1:26-cv-20609-KMW (S.D. Fla. Apr. 24, 2026) Dkt. No. 41.
Memorandum of Court-Appointed Amici Curiae, Trump v. Internal Revenue Service, No. 1:26-cv-20609-KMW (S.D. Fla. May 14, 2026) Dkt. No. 45.
Alan Feuer et al., Trump’s Proposed Settlement Fund Raises Legal and Ethical Questions, N.Y. Times (May 20, 2026) https://www.nytimes.com/2026/05/20/us/politics/trump-fund-legal-questions.html.
Settlement Agreement, Trump v. Internal Revenue Service, No. 1:26-cv-20609-KMW (S.D. Fla. May 18, 2026) https://www.justice.gov/opa/media/1441201/dl?inline.