The Department of Justice is having “internal discussions” about potentially settling President Donald Trump’s lawsuit against the Internal Revenue Service, The New York Times reported on Tuesday night.

In January, the president sued his own administration for $10 billion in damages stemming from a leak of his tax returns that occurred during his first term. His sons Donald Trump Jr. and Eric Trump, who run the Trump Organization, are also suing. Based on the leaks, the Times reported in 2020 that the billionaire president paid just $750 in income tax in 2016 and in 2017.

“The IRS wrongly allowed a rogue, politically-motivated employee to leak private and confidential information about President Trump, his family, and the Trump Organization to the New York Times, ProPublica and other left-wing news outlets, which was then illegally released to millions of people,” a Trump spokesperson said in January.

The leaks were the handiwork of Charles Littlejohn, a former IRS contractor who worked for Booz Allen. He pleaded guilty to unauthorized disclosures of tax returns and was sentenced in 2024 to the maximum of five years.

Last month, lawyers for the president asked a federal judge for a 90-day extension with respect to a key deadline in the case, suggesting that a settlement may be near. On Tuesday, the Times said settlement talks are underway, citing three people familiar with the situation.

“Whether to settle the suit and on what terms remains up in the air,” the paper stated. “One of the settlement options the Justice Department and White House officials are reviewing is the possibility of the I.R.S. dropping any audits of Mr. Trump, his family members or businesses, according to two of the people.”

The DOJ is representing the IRS in the case. That is the same DOJ that is helmed by acting Attorney General Todd Blanche, who served as Trump’s personal attorney in between presidential terms.

“We have a man who’s doing a great job, I’ll tell you,” Trump said of the attorney general on Monday. “I knew it, because he kept me out of jail for years. Acting Attorney General Todd Blanche. He kept me out of jail.”

In October, the Times reported that Trump is seeking $230 million from the Department of Justice over the FBI’s investigation into potential ties between his 2016 campaign and Russia, as well as the bureau’s execution of a warrant at his Mar-a-Lago residence in 2022. In that instance, Trump did not sue the DOJ, but filed two complaints via an administrative claims process in which members of the president’s administration will determine whether to pay the amount the president is seeking.

New: The Mediaite One-Sheet "Newsletter of Newsletters"
Your daily summary and analysis of what the many, many media newsletters are saying and reporting. Subscribe now!