Pilfering the Public’s Tax Funds

In January, President Donald Trump, alongside Donald Trump Jr., Eric Trump, and the Trump Organization, filed a $10-billion lawsuit against the Internal Revenue Service and the Treasury Department, alleging failures to safeguard his tax information.[1] While concerns about unauthorized, politically motivated disclosures by the IRS against a private citizen might need review, this case raises a more fundamental issue: the integrity of the rule of law when a sitting President brings a claim against agencies he directly oversees.

At the core of the rule of law is the principle that no individual, not even the President, should be both a litigant and, in effect, a supervisor of the institutions responsible for adjudicating or resolving that dispute. That is why we have three branches of government: Judiciary, Legislative and Executive. When a president sues executive branch agencies under his own authority, it creates an inherent conflict that risks eroding public confidence in impartial governance. The president’s own remark that he is “supposed to work out a settlement with myself” underscores how easily standard legal boundaries can blur in such circumstances.

The audacity of the President’s case has no analogy. No President has ever brought a case against an agency the President oversees. The Supreme Court has never approved of such a case but has required that any lawsuit must involve an actual case and controversy. Ironically, cases like Myers v. United States and Seila Law v. CFPB emphasize that executive agencies are ultimately under presidential control.

This cuts against the idea of a truly adversarial lawsuit between a president and his own agencies because they are not independent parties in the usual sense. A president suing his own agencies raises structural questions about whether there is a genuine legal dispute at all. The Supreme Court requires a real, concrete dispute between genuinely adverse parties. In cases involving intra-government disputes, courts sometimes question whether the conflict is sufficiently adversarial. A lawsuit where the plaintiff effectively controls the defendant could be challenged as lacking true adversity.

Note that in United States v. Nixon (1974), the Supreme Court allowed a subpoena against President Nixon to proceed, even though it involved the executive branch.

Importantly, the Court found a justiciable dispute in that case because the Special Prosecutor was deemed to have an independent institutional interest. The implication is that the Court has allowed disputes involving the president, but only where there is clear independence on both sides.

Lower courts have occasionally dealt with disputes between executive actors, but these usually involve independent agencies, or officials with some statutory insulation from presidential control. The more direct the president’s control, the more legally problematic the lawsuit becomes.

This concern is amplified by the scale of the claim. The $10 billion sought represents roughly two-thirds of the IRS’s projected 2026 budget. Such an extraordinary demand, directed at agencies within the president’s control, raises legitimate questions about whether the normal safeguards of independent legal process can function as intended. The possibility of a settlement influenced by political authority rather than neutral legal judgment would represent a serious departure from established norms.

For decades, presidents and major-party nominees have voluntarily disclosed their tax information to promote transparency and avoid even the appearance of conflicts of interest. Departing from that tradition while simultaneously seeking substantial taxpayer-funded compensation tied to undisclosed financial matters further complicates the public’s ability to assess the fairness of the claim.

More broadly, the lawsuit sits uneasily alongside longstanding principles governing public funds. Taxpayer money is appropriated by Congress for defined public purposes. Redirecting such funds through a claim advanced by the nation’s chief executive, particularly one that could significantly increase his personal wealth, raises difficult constitutional and ethical questions about the proper use of public resources.

These issues are not about the merits of any individual grievance alone. They go to the heart of whether legal processes remain independent when applied to those in power. Preserving the rule of law requires not only that justice be done, but that it be seen to be done. If the President pays himself billions, or even millions, of dollars in public funds, it is hard for the public to see his act as being free from conflicts, influence, or the appearance of self-dealing.

[1] Trump et al. v. Internal Revenue Service et al. (U.S. District Court for the Southern District of Florida) Docket number 1:26-cv-20609. The case is brought not only against the agent who made the disclosure but against the IRS, for gross negligence in allowing the disclosure.