In testimony before the Senate Banking, Housing and Urban Affairs Committee on Thursday, U.S. Treasury Secretary Scott Bessent confirmed that if President Donald Trump‘s unprecedented $10 billion lawsuit against the Internal Revenue Service and Treasury Department is successful, the payout would ultimately be financed by American taxpayers.
According to reporting by The New Republic, during a tense exchange between Democratic Senator Ruben Gallego of Arizona and Bessent, who also serves as acting IRS Commissioner, Bessent was asked where such a large payment would originate.
After an initial hesitation, Bessent said the funds would come from the Treasury’s general account, the federal government’s main fund supported by taxpayer revenue. Senator Gallego pressed him on whether that meant taxpayers would bear the cost, to which Bessent said yes.
The lawsuit stems from a significant leak of Trump’s confidential tax returns in 2019 and 2020, which were published by The New York Times and other media outlets. According to CNBC, the disclosure occurred after Charles Edward Littlejohn, a former IRS contractor, admitted to unlawfully accessing and disseminating tax information of Trump and hundreds of thousands of other taxpayers. Littlejohn was later sentenced to prison for the breach, which also exposed other wealthy individuals’ records.
Trump’s legal team, including his adult sons and the Trump Organization, argues that the leaks caused reputational harm, financial damage, and public embarrassment and is seeking $10 billion in damages. The complaint was filed in federal court in Miami and has drawn both partisan and nonpartisan scrutiny for its legal basis and political implications.
The Associated Press reported that even if Trump’s claim for such a high sum is likely to be challenged as excessive, courts could still approve a settlement that obligates taxpayer funds. Such a settlement would come from federal coffers that rely on tax revenue collected across the country.
On the Senate floor and in correspondence with Treasury and Justice Department leadership, Democratic Senators Ron Wyden and Elizabeth Warren labeled the lawsuit a “transparent act of corruption” and urged Bessent and Attorney General Pam Bondi to defend taxpayers’ interests rather than “confer a $10 billion windfall” on Trump. Their letter emphasized that statutory remedies exist for unauthorized disclosure of tax data but are not meant to provide multibillion‑dollar windfalls for individuals, even high‑profile ones.
According to The New Republic, Trump has publicly suggested that he would donate any money he receives from the lawsuit to charity, though he has not specified which organizations would benefit. In interviews, he described the lawsuit as a vindication of his rights.
