Trump could be on the hook for taxes on his $1.8 billion 'Weaponization Fund'

[LetMyPeopleVote]

Federal income tax experts tell POLITICO money from the DOJ's Judgment Fund, which the new program is drawing on, is generally taxable.

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https://www.politico.com/news/2026/05/28/trump-anti-weaponization-fund-big-tax-bill-00938957

President Donald Trump isn’t supposed to directly profit from the dismissal of his lawsuit against the IRS.

And yet, he could still owe taxes on the money going to set up a central feature of that deal — the $1.8 billion “Anti-Weaponization Fund.”

Some tax practitioners say the way that the fund, which Acting Attorney General Todd Blanche announced May 18, is structured likely makes it an income tax liability for the president, potentially costing hundreds of millions of dollars.

The argument stems from the fact the Trump administration is setting up its new “anti-weaponization” initiative through the Treasury Department’s Judgment Fund, which Congress set up decades ago to automatically pay federal court settlements.

Payments from the fund can only be made to actual litigants, and proceeds from legal settlements generally are taxable, with an exception for compensation for medical injuries or sickness.

Senior administration officials and critics alike have said this is a particularly unusual use of the Judgment Fund, with little to no precedent for how the money setting up the “anti-weaponization” pool might be taxed. The White House referred questions to the Justice Department.

But effectively, a range of federal income tax experts said Trump appears to be the beneficiary of the $1.8 billion, even if the money is eventually routed to others through the five-person commission responsible for disbursing the fund.

If this fund goes through, trump should be taxed on the full amount and not get a tax deduction for the money distributed to the beneficiaries of this fund