By Nandita Bose, Steve Holland and Dan Rosenzweig-Ziff
WASHINGTON, June 1 (Reuters) - President Donald Trump's $1.8 billion fund to compensate victims of alleged government “weaponization" has been put on hold, two sources familiar with the plan said on Monday.
The fund emerged from a legal settlement between Trump and the Justice Department to resolve an unprecedented lawsuit in which the president had sued the Internal Revenue Service for $10 billion over the alleged mishandling of his tax records.
The $1.776 billion was meant to pay people who said they had been the subject of government abuse.
The fund sparked swift legal challenges and political uproar, including from Senate Republicans, who expressed anger that people who attacked the U.S. Capitol on January 6, 2021, could receive taxpayer-funded payouts. Critics condemned it as a slush fund.
On Friday, federal judges in Virginia and Florida dealt the administration a pair of blows, issuing orders that temporarily halted the fund until June 12 and called for further review.
In a statement on Monday, a Justice Department spokesperson said the DOJ "disagrees strongly" with the temporary halting of the fund but, "the Department will abide by the Court's ruling."
The settlement agreement also barred the IRS from pursuing any audits into past tax claims for Trump, his relatives and his companies for any tax returns filed before May 18. It was not clear how or whether the pausing of the fund would affect any possible audits of Trump's past tax claims.
Senate Majority Leader John Thune told reporters on Monday that he thought the best way to handle the fund would be "if the administration decides to shut it down themselves."
(Reporting by Nandita Bose, Steve Holland, Dan Rosenzweig-Ziff and Richard Cowan; Editing by Colleen Jenkins and Daniel Wallis)
