US President Donald Trump (R) and his son Eric Trump (L) depart the White House en route to Charlottesville, Virginia on April 10, 2026, in Washington DC.
Celal Gunes | Anadolu | Getty Images
President Donald Trump, his two eldest sons, and the Trump Organization dropped their $10 billion lawsuit against the Internal Revenue Service on Monday, according to a Miami federal court filing.
The filing by Trump’s lawyers did not say what led to the surprising move, but it suggested it effectively barred a judge from analyzing whether the president’s civil suit was legally valid, and from dismissing it if she finds it is invalid.
The dismissal came on the heels of controversy over reports that the Department of Justice was negotiating a settlement with the president that could see the federal government pay $1.7 billion toward a fund to compensate allies of Trump who allege wrongful treatment by the Biden administration.
Democratic members of Congress said that would be a “slush fund.”
CNBC has asked the DOJ if Trump’s dismissal of the suit is being made in conjunction with a settlement by the government of his claims outside of court.
The court filing on Monday said Donald Trump, Donald Trump Jr., Eric Trump, and The Trump were voluntarily dismissing the lawsuit against the IRS “with prejudice.”
With prejudice means the plaintiffs can not renew the same claims in another civil complaint.
The notice of dismissal came two days before a deadline set by U.S. District Court Judge Kathleen Williams for the DOJ and Trump’s attorneys to answer whether a “case and controversy exists in this matter so as to establish the Court’s jurisdiction.”
Williams’ question suggested that because Trump is suing “entities whose decisions are subject to his direction,” there might not be enough actual adversity between the parties to satisfy a constitutional requirement that federal courts only adjudicate cases or controversies.
The filing on Monday said that Trump’s dismissal means “no judicial analysis is appropriate, and any “subsequent order purporting to dismiss ‘all claims’ . . . [would be] a nullity.”
Trump sued the IRS in late January over the leak of his tax information by an IRS employee Charles “Chaz” Littlejohn in 2019 and 2020.
A spokesman for Trump’s attorneys had no immediate comment on the dismissal.
The IRS did not immediately respond to a request for comment.
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