The US Department of Justice (DOJ) on Friday (local time) said it is finalising a deal to launch a so-called “Truth and Justice Commission,” along with establishing a compensation fund worth $1,776,000,000 for alleged victims of government “weaponization.”ABC News, citing sources, reported that the fund would be created in exchange for President Donald Trump dropping his ongoing lawsuit against the Internal Revenue Service (IRS).The proposed deal, which is likely to face legal challenges and has already drawn criticism from Democrats as a “slush fund” for Trump allies, emerged after months of discussions between White House and DOJ officials. At first, officials sought a legal basis to compensate Trump directly through the settlement.Why is Trump creating the fund?The $1.7 billion fund would be used to compensate Trump allies who believe they were unfairly targeted by former President Joe Biden’s administration. According to the report, the commission overseeing the compensation fund would have broad authority to distribute roughly $1.7 billion in taxpayer money to settle claims from individuals alleging they were harmed by the Biden administration’s alleged “weaponization” of the legal system.Eligible claimants could include the nearly 1,600 people charged in connection with the January 6 Capitol attack, as well as entities potentially linked to the incumbent US president.How will the compensation fund work?The fund would draw money from the Treasury Department’s Judgment Fund, a permanently available pool of government money used to pay court judgments and legal settlements.Sources told ABC News that the proposed “President Donald Trump Truth and Justice Commission” would consist of five commissioners, four of whom would be appointed by the attorney general. Trump would also have the authority to remove commissioners without needing to provide a reason. In addition, the commission would not be required to publicly disclose how it distributes the nearly $2 billion in funds.Why did Trump sue the IRS?Earlier in January this year, the US president, along with his two sons and the Trump Organization, sued the IRS and the Treasury Department over the unauthorised disclosure of his tax information during his first term, for which a former IRS contractor pleaded guilty in 2023.In the lawsuit, Trump, Donald Trump Jr., Eric Trump, and the Trump Organization accused the two government agencies of failing to safeguard their confidential tax returns and related information from unauthorised access and public disclosure.The suit further alleged that the government caused them “reputational and financial harm, public embarrassment, unfairly tarnished their business reputations, portrayed them in a false light, and negatively affected President Trump and the other plaintiffs’ public standing.”The plaintiffs sought $10 billion in damages, and the lawsuit was filed in Florida.In 2023, Charles Littlejohn, an IRS contractor, admitted to illegally accessing and leaking confidential tax records linked to Trump and thousands of wealthy Americans to two media outlets in 2019 and 2020.Littlejohn was later sentenced to five years in prison. During his 2024 sentencing hearing, a federal judge described the leak as “an attack on our constitutional democracy.”In a court filing this week, attorneys raised major concerns about the lawsuit, arguing that Trump exercises “extraordinary” control over the defendants in the case. They said the circumstances raised concerns that the defendants and their lawyers may be acting at the president’s direction rather than independently.The proposed settlement and compensation fund are expected to face intense legal and political scrutiny in the coming weeks, particularly over the use of taxpayer money, the commission’s broad powers, and questions surrounding the independence of the process.