‘What we’re seeing here is outright corruption’: ABC News uncovers what was really behind Trump’s $1.776 billion IRS deal

ABC News has revealed new details about a proposed deal that would see President Donald Trump drop a major lawsuit against the IRS. According to the report, the deal involves a $1.776 billion fund being called a “Truth and Justice Commission,” which would compensate people who claim they were unfairly targeted by the IRS and the Justice Department. Critics have wasted no time calling this outright corruption, and the backlash from lawmakers has been swift.

Trump has been suing the IRS over the leak of his tax returns in 2019 and 2020, which led to an investigation into his finances. The lawsuit created a significant conflict of interest since Trump is currently in charge of the very agencies he is suing. DOJ lawyers had initially argued that this conflict of interest could be set aside and the lawsuit could continue as normal, but that plan was eventually dropped in favor of the $1.776 billion compensation fund.

The proposed “Truth and Justice Commission” would have five commissioners, four of whom would be appointed by the attorney general. The commission would have the power to award nearly $2 billion in compensation, but it would have no obligation to disclose how those decisions were made. This lack of transparency has raised serious concerns about cronyism and the extent of the administration’s influence over the commission’s decisions.

The $1.776 billion deal raises serious conflict-of-interest concerns that lawmakers cannot ignore

Rep. Alexandria Ocasio-Cortez (D-NY) was quick to respond, calling the deal a clear case of corruption. She pointed out that Trump himself would not even be eligible to receive money from the fund, yet $1.7 billion would go into a fund that could benefit his allies. Earlier reports had already flagged that Trump’s DOJ was exploring a deal to end IRS audits of Trump and his family entirely, which only added more fuel to the controversy.

“It’s a billion dollars for a ballroom; $1.7 billion for a slush fund for the president’s friends,” Ocasio-Cortez said. “What we’re seeing here is outright corruption.” In a separate statement, she also said, “It’s outrageous that President Trump is trying to use taxpayer dollars to pay off his friends and allies. This is a clear case of corruption and a slap in the face to the American people.”

Pennsylvania Republican Rep. Brian Fitzpatrick suggested the matter could end up before the Supreme Court, pointing to just how complicated and controversial the situation has become. The fact that a Republican lawmaker is raising such serious concerns signals that the backlash is not limited to one side of the aisle. 

Some lawmakers have also called for Congress to pass legislation that would restrict the use of taxpayer money for the proposed compensation fund. This controversy comes at a time when Trump has also drawn criticism for shrugging off China’s cyberattacks on U.S. infrastructure, raising broader questions about accountability in his administration.

The deal has also raised questions about court oversight. Sources told ABC News that DOJ lawyers believe the settlement would not need any approval from a court, though it remains unclear whether that position would hold up. Judge Williams, who has already raised concerns about Trump suing the government he leads, has yet to formally respond to the proposed settlement, and her decision could prove to be a key moment in how this situation plays out.

What makes this deal particularly controversial is the sheer lack of accountability. The commission would be able to hand out nearly $2 billion in taxpayer money with no requirement to explain how or why specific decisions were made. There would be no public record of who received funds or on what basis, which critics say makes the entire setup look less like a justice mechanism and more like a blank check for the administration to distribute as it sees fit.