Lawyers representing U.S. President Donald Trump are engaged in discussions with the Internal Revenue Service (IRS) and the United States Department of the Treasury in an effort to resolve a $10 billion lawsuit alleging the unauthorized disclosure of his tax information.
The negotiations were revealed in a court filing submitted Friday to a federal district court in Florida. In the filing, Trump’s legal team requested a 90-day extension to allow both sides to pursue settlement discussions and potentially avoid a prolonged legal battle.
“This limited pause will neither prejudice the parties nor delay ultimate resolution,” the filing stated. “Rather, the extension will promote judicial economy and allow the parties to explore avenues that could narrow or resolve the issues efficiently.”
The lawsuit, filed by Trump in his personal capacity rather than as president, centers on claims that federal agencies failed to safeguard his confidential tax records. The case has drawn scrutiny over potential conflicts of interest, given that Trump oversees the very agencies he is suing. Any financial settlement could also raise ethical questions, as it would involve government funds being paid to a sitting president and his family.
The legal action also includes Trump’s sons, Donald Trump Jr. and Eric Trump, and targets the alleged mishandling of sensitive tax data linked to the Trump Organization.
At the center of the dispute is Charles Littlejohn, a former IRS contractor who, according to the lawsuit, unlawfully accessed and leaked thousands of tax returns belonging to Trump and other high-profile individuals. The information was reportedly shared with major media outlets, including The New York Times and ProPublica.
Littlejohn, who worked through consulting firm Booz Allen Hamilton, was sentenced in 2024 to five years in prison after pleading guilty to unauthorized disclosure of tax information. Prosecutors said he exploited his access to sensitive data systems to obtain and distribute confidential records.
Trump’s legal team argues that the IRS bears responsibility for the breach, asserting that Littlejohn was granted “staff-like access” to highly sensitive taxpayer information. The lawsuit further claims that longstanding security vulnerabilities within the agency were known but left unaddressed, enabling the leak.
The case adds another layer to the long-running controversy surrounding Trump’s tax transparency. During his first term in office, Trump broke with decades of presidential tradition by declining to publicly release his tax returns, a decision that became a focal point of political and legal debate.
In 2022, the House Ways and Means Committee released six years of Trump’s tax returns following a protracted legal battle that ultimately reached the Supreme Court of the United States. The disclosure intensified scrutiny over his financial affairs and tax practices.
The latest development also follows a separate and controversial settlement involving Trump’s former national security adviser, Michael Flynn. Last month, the United States Department of Justice agreed to pay Flynn more than $1 million to resolve a wrongful prosecution case, sparking criticism over the use of public funds in politically sensitive legal disputes.
As negotiations continue, officials from the Treasury Department and the Justice Department have not publicly commented on the discussions. The IRS has referred inquiries to the Justice Department, which typically represents federal agencies in litigation.
Legal experts suggest that a negotiated resolution could limit political fallout and reduce the risk of extended courtroom proceedings. However, given the high-profile nature of the case and the substantial financial stakes involved, any potential settlement is likely to face intense public and political scrutiny.
For now, both sides appear to be exploring a path toward resolution, though it remains unclear whether the talks will lead to a settlement or if the case will ultimately proceed through the courts.
