lawsuit

Court filings have indicated that lawyers for President Donald Trump are seeking a resolution with the Department of Justice over a $10bn lawsuit he filed against the Internal Revenue Service (IRS).

But the trouble, critics say, is that such a settlement would leave Trump essentially negotiating with an executive branch under his control.

Friday’s court filing, however, emphasises the efficiency of seeking a settlement.

In the document, Trump’s lawyers call for the case to be paused for 90 days to allow a resolution to be hammered out.

“This limited pause will neither prejudice the parties nor delay ultimate resolution,” the filing says. “Rather, the extension will promote judicial economy and allow the Parties to explore avenues that could narrow or resolve the issues efficiently.”

How did the case start?

The case stems from an incident that began in 2017, when a worker named Charles “Chaz” Littlejohn was re-hired as a contractor through the government consulting firm Booz Allen.

While working on IRS files, Littlejohn stole copies of Trump’s tax returns, which had been the source of prolonged public scrutiny.

Until Trump, every president since Richard Nixon had released their tax returns as a gesture of transparency. Trump, however, claimed he could not, citing ongoing audits.

The tax returns Littlejohn stole were ultimately released to the media, and in 2020, The New York Times released a series of articles that showed Trump paid no income taxes in 10 of the 15 preceding years.

Other years, he paid relatively small sums, like $750, because he reported more losses than gains. ProPublica also ran stories based on the leaked tax returns, highlighting inconsistencies and Trump’s low tax payments.

Privacy law protects taxpayer information from being released by the IRS without explicit permission. Littlejohn was sentenced to five years in prison in 2024.

But in late January of this year, Trump filed a lawsuit arguing that he, his businesses and his sons Eric and Donald Jr had suffered “significant and irreparable harm” from the leaks.

The defendants in the lawsuit were the IRS and its overseeing body, the Treasury Department, both of which are part of the executive branch.

“Defendants have caused Plaintiffs reputational and financial harm, public embarrassment, unfairly tarnished their business reputations, portrayed them in a false light, and negatively affected President Trump and the other Plaintiffs’ public standing,” the lawsuit reads.

Questions of ethics and legality

But experts have warned that the lawsuit contains flaws that would normally prompt the Justice Department, also under Trump’s control, to seek dismissal.

The lawsuit, for instance, arrives at its whopping $10bn sum by supposedly tallying up media references to Trump’s leaked tax returns.

However, experts say the formula for damages is calculated by the number of unauthorised disclosures by a government employee, not by media re-printings.

Then there is the question of Littlejohn’s employment status. He was an outside contractor, not a government employee.

Trump also has to contend with the two-year statute of limitations in the case. The lawsuit contends that “President Trump did not discover the numerous violations” of his tax returns until January 29, 2024.

But critics point out he had posted on social media about his tax information being “illegally obtained” as far back as 2020, when The New York Times published its series.

Opponents say the lawsuit should be dismissed or at least delayed until Trump is no longer president. Otherwise, they argue it represents a conflict of interest, with Trump fundamentally negotiating with his own administration for a payout.

Controlling ‘both sides of the litigation’

Trump himself has acknowledged that such a payment would “never look good”. But he has justified the sum by saying it would be donated to charity.

“Nobody would care because it’s going to go to numerous very good charities,” he said in February.

Even that, legal experts argue, could run afoul of the Emoluments Clause in the US Constitution, which prohibits the president from profiting off his position, apart from his salary.

Government watchdogs have attempted to stop a settlement from unfolding. On February 5, for instance, the group Democracy Forward filed an amicus brief arguing the court should act to prevent an abuse of power.

“This case is extraordinary because the President controls both sides of the litigation, which raises the prospect of collusive litigation tactics,” the brief explains.

“To treat this case like business as usual would threaten the integrity of the justice system and the important taxpayer and privacy protections at the heart of this case.”

But the $10bn IRS lawsuit is not the only case Trump is seeking to settle with his own government. In 2023 and 2024, Trump filed administrative complaints seeking compensation for federal investigations he considered to be unfair.

One complaint concerns an FBI investigation into alleged Russian interference in the 2016 election, and the other is about the FBI’s raid of Trump’s Mar-a-Lago estate after he refused a subpoena to return classified documents.

For those complaints, Trump is reportedly seeking additional damages to the tune of $230m.

A federal judge has blocked Nexstar Media Group’s $6.2-billion acquisition of its rival, upending the already consummated union of the nation’s two largest television station groups.

U.S. District Court Chief Judge Troy L. Nunley on Friday issued a preliminary injunction that forbids Nexstar, which owns KTLA-TV Channel 5 in Los Angeles, and its takeover-target, Tegna Inc., from combining operations amid a legal dispute with California Atty. Gen. Rob Bonta and seven other state attorneys general.

The order takes effect Tuesday.

“Nexstar must permit Tegna to continue operating as a separate and distinct, independently managed business unit from Nexstar,” Nunley wrote in his 52-page order. “And Nexstar must put measures in place to maintain Tegna as an ongoing, economically viable, and active competitor.”

The injunction is Nexstar’s latest setback in the controversial deal championed by President Trump.

Bonta and the others are opposed to the merger, arguing it violates a 112-year-old U.S. antitrust law by knocking out a major competitor. The deal would give Irving, Texas-based Nexstar control of 265 television stations across the country, up from 164. And, in dozens of markets, including San Diego and Sacramento, Nexstar would own multiple TV network affiliates.

That duplication has raised concerns about staff consolidations and widespread newsroom layoffs.

“This is a critical win in our case,” Bonta said in a statement. “This merger is illegal, plain and simple. The federal government may have thrown in the towel, but we’ll keep fighting for consumers, for workers, for affordability and for our local news.”

Nexstar, in a statement, said that it will appeal the ruling, but that it has taken steps to comply with the court order.

“For nearly thirty years, Nexstar has provided free over-the-air access to all its broadcast stations — local news, weather, and community-focused programming alongside major network programming,” Nexstar said. “This procompetitive transaction will make local stations stronger and support continued investment in local journalism and fact-based news.”

Bonta and other state attorneys general sued to block the merger March 18. The state officials, all Democrats, alleged the union would create “a broadcast behemoth” with the “power to raise prices for television consumers” and diminish “local news and sports,” their lawsuit stated.

El Segundo-based DirecTV separately sued. It alleged the merger would dramatically tilt the pay-TV playing field, forcing DirecTV to pay dramatically higher fees for the rights to carry Nexstar-Tegna station programming, including local news and NFL football. Those costs, DirecTV said, would be passed along to its 10 million customers.

Trump had been agitating for the deal, writing in a February social media post: “GET THAT DEAL DONE!”

On March 19, the day after the lawsuits, the Trump administration approved the deal. The U.S. Justice Department terminated its antitrust review and the Federal Communications Commission’s Media Bureau authorized the transfer of Tegna’s station licenses to Nexstar.

Within an hour, Nexstar announced that it had finalized the purchase of its McLean, Va.-based rival.

Tegna was dissolved and its stockholders were paid out — raising questions about the fate of Tegna’s stations.

“Nexstar must not influence the management of the held-separate TEGNA business unit,” Nunley wrote. “Tegna personnel must maintain control over Tegna’s decisionmaking, including … negotiations [with pay-TV partners], newsroom personnel, operations and programming, product and service offerings, product development, advertisement sales, and personnel.”

Nexstar has complained about the unusual nature of blocking a transaction after-the-fact. But the plaintiffs noted that Nexstar had been aware of the state attorneys general concerns since at least March 10 — more than a week before DirecTV and the state regulators sued.

Colorado, Connecticut, Illinois, New York, North Carolina, Oregon and Virginia have joined California in the lawsuit.

The merger was not approved by the full FCC commission, prompting two U.S. senators — Ted Cruz (R-Texas) and Maria Cantwell (D-Wash.) — to question the FCC’s handling of the matter.

“This decision raises serious concerns about the Commission’s use of delegated authority in matters involving significant legal, policy, and economic consequences,” the two lawmakers wrote in a March 30 letter to the FCC. “The transaction is unprecedented in scale, resulting in the largest local broadcast television group in U.S. history.”

Nexstar has built itself into a colossus through a series of acquisitions, including its $6.2-billion takeover of Tribune Broadcasting, the longtime owner of KTLA, in 2019 — during the first Trump term.

Opponents have argued that Nexstar’s proposed purchase of Tegna gives Nexstar stations in 44 states covering 80% of the U.S. population — exceeding a 39% ownership cap set by Congress.

DirecTV has argued that the combination of the nation’s two largest television station groups could harm its pay-TV business by raising prices for consumers and potentially increasing programming blackouts.

The judge late last month combined the two lawsuits.

During a two-hour hearing earlier this month, Nexstar attorneys argued against the injunction, saying it had obtained the necessary federal approvals to take control of the Tegna stations.

“Setting aside the unusual FCC clearance process here, the Court does not find Defendants’ arguments persuasive,” Nunley wrote.

Nexstar contends the deal would strengthen TV station economics, allowing stations to bolster their news gathering and expand the number of newscasts. But DirecTV countered that in markets where Nexstar owns two stations, it relies on just one newsroom to program both channels.

“We commend the Court’s decision, which reinforces the coalition of states’ and our shared belief that unchecked station consolidation will force consumers to pay more for less by reducing the quality and variety of local news coverage,” DirecTV said in a statement.

Nexstar attorney Alexander Okuliar said the plaintiffs failed to demonstrate that the merger posed an immediate threat to the public.

Nunley, who was appointed by former President Obama, wrote in his order that the plaintiffs demonstrated they had a path to prevail at a trial due to the merits of their arguments.

Nexstar had asked the judge to require the plaintiffs to post a $150-million bond to compensate it for damages it would suffer from any delays in closing the deal.

But the judge denied that request, writing that Nexstar did not offer a “financial analysis or documentary evidence to support a bond in this amount” or any evidence that it would incur financial losses should the injunction be overturned.

WASHINGTON — Lawyers for President Trump are engaged in talks with the IRS to resolve a $10-billion lawsuit the president filed against his own tax collection agency over the leak of his tax information to news outlets between 2018 and 2020.

In a federal court filing Friday, Trump asks a judge to pause the case for 90 days while the two sides work to reach a settlement or resolution.

“This limited pause will neither prejudice the parties nor delay ultimate resolution,” the filing says. “Rather, the extension will promote judicial economy and allow the Parties to explore avenues that could narrow or resolve the issues efficiently.”

Tax and ethics experts say the lawsuit raises a plethora of legal and ethical questions, including the propriety of the leader of the executive branch pursuing scorched-earth litigation against the very government he oversees.

Earlier this year, Trump filed a lawsuit in a Florida federal court, alleging that a previous leak of his and the Trump Organization’s confidential tax records caused “reputational and financial harm, public embarrassment, unfairly tarnished their business reputations, portrayed them in a false light, and negatively affected President Trump, and the other Plaintiffs’ public standing.”

The president’s sons, Donald Trump Jr. and Eric Trump, are also plaintiffs in the suit.

In 2024, former IRS contractor Charles Edward Littlejohn, of Washington — who worked for Booz Allen Hamilton, a defense and national security tech firm — was sentenced to five years in prison after pleading guilty to leaking tax information about President Trump and others to two news outlets between 2018 and 2020.

The outlets were not named in the charging documents, but the description and time frame align with stories about Trump’s tax returns in the New York Times and reporting about wealthy Americans’ taxes in the nonprofit investigative journalism organization ProPublica. The 2020 New York Times report found Trump paid $750 in federal income tax the year he first entered the White House, and no income tax at all some years, thanks to reported colossal losses.

When asked in February how he would handle any potential damages from the case, Trump said, “I think what we’ll do is do something for charity.”

“We could make it a substantial amount,” he said at the time. “Nobody would care because it’s going to go to numerous very good charities.”

Several ethics watchdog groups have filed friend-of-the-court briefs challenging the president’s lawsuit.

The watchdog group Democracy Forward’s February filing states that the case is “extraordinary because the President controls both sides of the litigation, which raises the prospect of collusive litigation tactics,” and “the conflicts of interest make it uncertain whether the Department of Justice will zealously defend the public fisc in the same way that it has against other plaintiffs claiming damages for related events.”

Hussein writes for the Associated Press.