https://www.politico.com/news/2026/05/28/trump-anti-weaponization-fund-big-tax-bill-00938957President Donald Trump isn’t supposed to directly profit from the dismissal of his lawsuit against the IRS.
And yet, he could still owe taxes on the money going to set up a central feature of that deal — the $1.8 billion “Anti-Weaponization Fund.”
Some tax practitioners say the way that the fund, which Acting Attorney General Todd Blanche announced May 18, is structured likely makes it an income tax liability for the president, potentially costing hundreds of millions of dollars.
The argument stems from the fact the Trump administration is setting up its new “anti-weaponization” initiative through the Treasury Department’s Judgment Fund, which Congress set up decades ago to automatically pay federal court settlements.
Payments from the fund can only be made to actual litigants, and proceeds from legal settlements generally are taxable, with an exception for compensation for medical injuries or sickness.