Trump to drop $10B IRS lawsuit in exchange for massive fund to pay off allies: report

President Donald Trump is expected to drop his massive, $10 billion lawsuit against the Internal Revenue Service, but not for reasons some might expect, according to a new report.

ABC News reported on Thursday that Trump plans to drop the lawsuit in exchange for creating a $1.7 billion fund that he can use to pay allies who claim they were wrongfully targeted by the Biden administration. Those allies include recently pardoned Jan. 6 rioters like the Proud Boys and Oathkeepers, as well as lawmakers who were investigated by Biden's Department of Justice.

"The settlement terms are expected to prohibit Trump from directly receiving payments related to those three legal claims; however, entities associated with Trump are not explicitly barred from filing additional claims," the report reads in part.

Trump initially sued the IRS for $10 billion, claiming the agency should have done more to prevent his tax returns from being released during his first administration. The lawsuit raised conflict-of-interest concerns among some political analysts and observers because the IRS is an executive agency that Trump oversees.

A Trump spokesperson told ABC News that the IRS has "wrongfully" allowed a "rogue" employee to leak Trump's tax returns.

"The arrangement would be an unprecedented use of taxpayer dollars with little oversight," the report reads. "Under the terms of the potential settlement agreement, President Trump would have the authority to remove members of the commission running the fund without cause, and the commission would be under no obligation to disclose its procedures or decision-making process for awarding more than a billion dollars, the sources said."