President Donald Trump has asserted that a lawsuit against the U.S. government, seeking $10 billion, has been “essentially” won, with any awarded funds intended for approved charities. This suit stems from the alleged violation of IRS confidentiality rules concerning the leak of his tax returns, which reportedly showed minimal federal income tax payments in certain years. Trump also mentioned a separate $230 million lawsuit against taxpayers related to the FBI’s search of his Mar-a-Lago home. His claim of winning and his promise to donate the proceeds to charity have drawn criticism, citing his history with the Trump Foundation and allegations of self-dealing.
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President Donald Trump, along with his two eldest sons and the Trump Organization, has filed a lawsuit against the Internal Revenue Service and the U.S. Treasury Department. The lawsuit, filed in Miami federal court, alleges that the IRS and Treasury Department failed to prevent the leak of confidential tax information. The plaintiffs are seeking at least $10 billion in damages, claiming the leak was perpetrated by former IRS employee Charles “Chaz” Littlejohn. This legal action follows Treasury Secretary Scott Bessent’s cancellation of contracts with Booz Allen Hamilton due to Littlejohn’s actions.
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A federal judge has temporarily halted the IRS from sharing taxpayer information with ICE, deeming the practice unlawful. The court’s decision, based on a 94-page ruling, cited violations of the Administrative Procedure Act and several Internal Revenue Code provisions, specifically concerning the disclosure of confidential taxpayer address information. The IRS had already shared information on nearly 47,000 taxpayers in early August, prompting the judge to pause the data-sharing policy. This ruling preliminarily blocks the IRS and Treasury Department from sharing tax return information with the Department of Homeland Security, with some exceptions requiring judicial approval.
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I.R.S. Suspends Free Online Offering to File Taxes Directly
So, the IRS has decided to suspend its free online tax filing service, a move that’s stirring up a lot of frustration and, frankly, a bit of outrage. It seems the service, which allowed taxpayers to file directly with the government without paying for third-party software, won’t be available for the 2025 tax season. The general sentiment is that this is a step backward, and it’s not hard to see why.
Many people are questioning the timing and the reasons behind this decision. There’s a palpable sense that the interests of big tax software companies like TurboTax and H&R Block are being prioritized over the needs of average taxpayers.… Continue reading
The IRS will discontinue its Direct File program after a limited pilot and one full filing season, according to Commissioner Bill Long. This decision aligns with the policy directives within a large spending bill, which allocated resources to research and potentially replace direct e-file programs. Despite positive feedback from users, with 94% rating their experience as “excellent” or “above average,” the program is ending. The IRS is committed to modernizing its operations and will provide transparency regarding tax returns and audits.
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During a hearing, Judge Illston indicated she was likely to grant the plaintiff’s motion. She stated that the Office of Management and Budget and the Office of Personnel Management appeared to be disregarding laws during the government spending lapse. Illston believes the plaintiffs will demonstrate that the actions are both illegal, beyond their authority, and arbitrary. The case was brought by the American Federation of Government Employees and the American Federation of State, County and Municipal Employees, representing 800,000 federal workers.
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The IRS recently released updated federal income tax brackets and standard deductions for 2026, applicable for returns filed in 2027. The agency increased income thresholds for each bracket, along with adjustments to long-term capital gains brackets, estate and gift tax exemptions, and earned income tax credit eligibility. For the 2026 tax year, the top tax rate of 37% will apply to individuals with taxable income exceeding $640,600 and married couples filing jointly with income above $768,700.
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The Trump administration, backed by private tax-filing corporations, has officially shut down the IRS’s Direct File service, a free online tax-filing option. This decision comes despite positive reviews and a 94% satisfaction rate from users who saved an average of $160 annually on filing fees. The program was projected to save Americans billions annually and provide billions more in tax credits to low-income families. The move was influenced by months of lobbying from private tax-filing companies and GOP congresspeople who had received campaign donations from the tax preparation industry, leading to the program’s demise and financial gain for these companies.
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In a recent federal court filing, the IRS announced a significant shift in its interpretation of the Johnson Amendment. This change allows churches to endorse political candidates to their congregations without the risk of losing their tax-exempt status. The IRS stated that communications on matters of faith through usual channels do not violate the Johnson Amendment as properly interpreted. This filing was part of a joint motion to settle a lawsuit with the National Religious Broadcasters and two Texas churches, challenging the amendment’s constitutionality.
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The IRS has proposed a policy change that would allow pastors to endorse political candidates from the pulpit without jeopardizing their church’s tax-exempt status, effectively creating an exemption from the Johnson Amendment. This proposed interpretation stems from a joint court filing with the National Religious Broadcasters Association, aiming to halt enforcement of the amendment against the plaintiffs. The Johnson Amendment currently prohibits tax-exempt organizations, including churches, from endorsing or opposing political candidates, but the IRS now suggests this should not apply to communications during religious services through regular channels. This stance, though largely mirroring existing IRS practices, could significantly increase political expression within churches, as noted by experts in nonprofit law.
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John Q. Hosedrinker 
Matt Underwood
Judge Blocks IRS from Sharing Taxpayer Data with ICE: A Critique of Enforcement Practices
A federal judge has temporarily halted the IRS from sharing taxpayer information with ICE, deeming the practice unlawful. The court’s decision, based on a 94-page ruling, cited violations of the Administrative Procedure Act and several Internal Revenue Code provisions, specifically concerning the disclosure of confidential taxpayer address information. The IRS had already shared information on nearly 47,000 taxpayers in early August, prompting the judge to pause the data-sharing policy. This ruling preliminarily blocks the IRS and Treasury Department from sharing tax return information with the Department of Homeland Security, with some exceptions requiring judicial approval.
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