Trump drops IRS lawsuit amid fund dispute. President Trump agreed to drop his family’s lawsuit against the IRS as part of an agreement creating a nearly $1.8 billion “Anti-Weaponization Fund” for people who claim they were targeted by the justice system. House Democrats also filed a motion challenging the settlement, arguing the case is not a real legal dispute because Trump is effectively on both sides as plaintiff and as head of the executive branch. Justice Department officials said Trump and his family would not receive money from the fund, while critics say the arrangement could reward his allies at taxpayer expense. The original lawsuit sought up to $10 billion over the leak of Trump family tax records by former IRS contractor Charles Littlejohn, who pleaded guilty and was sentenced in 2024 to five years in prison.
Newborn credit would test fast tax delivery. TPC’s Margot Crandall-Hollick and Elaine Maag share new TPC analysis of the Supporting Newborn Parents Act. The legislation would provide a tax credit of up to $2,000 per newborn to help parents cover early costs such as diapers, formula, medical care, and child care. TPC estimates that 3.4 million families with children, or 6.5 percent, would receive just over $2,000 per family, at a 10-year cost of about $71 billion from fiscal years 2026 through 2035. The bill’s main innovation is delivery: Families could apply for the credit when they apply for a newborn’s Social Security number, with the Social Security Administration sharing information with the IRS so payments could arrive within weeks of birth. That design could make the credit easier to claim, but it would require strong IRS and SSA coordination at a time when IRS staffing and service capacity remain under pressure.
Migration data complicate tax-flight claims. TPC’s Lucy Dadayan argues that headlines about taxpayers fleeing high-tax states for low-tax states often overstate what IRS migration data can show. The latest IRS migration data are based on tax returns filed and processed in calendar years 2022 and 2023, reflecting income earned mainly in 2021 and 2022, and they do not identify exactly when or why people moved. Dadayan points to Massachusetts, where net taxpayer losses and net adjusted gross income losses were smaller in the 2022-2023 file than in the 2021-2022 file, undercutting claims that the state’s 2023 surtax caused a growing exodus. She concludes that taxes can matter for some households, but migration data are a starting point for analysis, not proof of a tax-driven flight.
Shakira wins Spanish tax refund order. A Spanish court ordered the country’s tax authority to refund €55 million to Shakira after ruling that authorities failed to prove the pop star was a Spanish tax resident in 2011. The court found that the singer spent 163 days in Spain that year, 20 days short of the 183-day threshold for personal income tax residency. The refund includes about €24 million in income tax and almost €25 million in fines, plus interest. Spain’s tax agency said it will appeal to the Supreme Court and that no payment will be made until a final ruling. The case is separate from a 2023 settlement covering tax years 2012 through 2014.
Register now for the 16th Annual IRS-TPC Joint Resarch Conference on Tax Administration. The hybrid event takes place on Thursday, June 25, from 8:30 a.m. to 4:30 p.m. EDT at the Urban Institute and will will feature researchers from the IRS, other government agencies, academia, and private organizations discussing tax administration research and ways to make tax administration more effective. Register here.
Remembering Daniel Halperin. Daniel Halperin, a longtime tax law scholar and former Treasury official, passed away on May 12. Halperin was the Stanley S. Surrey Professor of Law at Harvard Law School, previously taught at Penn and Georgetown, and served twice in Treasury’s Office of Tax Policy, including as deputy assistant secretary from 1978 to 1980. His scholarship covered timing and deferral, individual income tax, nonprofit taxation, employee benefits, and retirement savings. He also was an affiliated scholar with the Urban Institute and served on the advisory board for Urban’s Project on Tax Policy and Charities.
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