Lawyers for former President Donald Trump and his family are engaged in settlement discussions with the Internal Revenue Service and the Treasury Department regarding a $10 billion lawsuit alleging unauthorized disclosure of tax information during Trump’s first administration. The talks emerged from a court filing Friday in which Trump’s legal team requested a 90-day extension to allow parties to explore resolution options without prolonged litigation.
The lawsuit, filed personally by Trump in January 2026 and not in his official capacity as president, claims that the IRS and Treasury Department failed to adequately protect his confidential tax data and that of the Trump Organization from Charles Littlejohn, a former IRS contractor. Littlejohn leaked 15 years of Trump’s tax returns to The New York Times in 2019, which were published in September 2020, two months before the presidential election.
Trump’s attorneys have argued that despite Littlejohn’s classification as a contractor, he functioned as a “joint employee” of the IRS and Treasury Department due to the agencies’ extensive supervision of his work. They contend that this supervisory relationship makes the government liable for Littlejohn’s actions under federal law.
The legal filing requesting the extension states: “This limited pause will neither prejudice the Parties nor delay ultimate resolution. Rather, the extension will promote judicial economy and allow the Parties to explore avenues that could narrow or resolve the issues efficiently.” The motion was submitted to a Florida district court overseeing the case.
Ethical concerns have been raised regarding the inherent conflict of interest in Trump suing federal agencies he once oversaw as president. Legal experts note that any monetary settlement would ultimately be funded by taxpayer dollars, creating a scenario where the government would be paying the former president using public funds.
The discussions follow a similar settlement last month in which the Justice Department agreed to pay Trump’s former national security adviser Michael Flynn more than $1 million to resolve his wrongful prosecution case. That agreement also drew criticism over potential conflicts of interest and the use of public funds to settle claims involving individuals connected to the Trump administration.
Neither the IRS nor the Treasury Department has publicly commented on the ongoing talks, with the IRS deferring comment requests to the Justice Department. Trump’s legal representatives have not disclosed specific details about the nature of the settlement being discussed or potential timelines for resolution.
The case continues to highlight ongoing debates about taxpayer confidentiality, contractor oversight within federal agencies, and the legal protections available to former presidents regarding personal financial information. As of now, no formal settlement agreement has been reached, and the lawsuit remains active pending the outcome of the current negotiations.