Treasury’s Bessent defers to Justice Department on Trump’s IRS lawsuit

By David Lawder and Andrea Shalal

WASHINGTON, Feb 5 (Reuters) – U.S. Treasury Secretary Scott Bessent on Thursday said any settlement of President Donald Trump’s $10 billion lawsuit against the department and Internal Revenue Service would come from Treasury’s general account, adding that he defers to the U.S. Justice Department on the matter.

Bessent told a Senate Banking Committee hearing that he had not spoken with the president or the White House about the lawsuit, adding that this was a Justice Department matter and he had no say about it.

He said he would await instructions from the Justice Department on whether to issue any payment to Trump, if the president were to prevail in the suit, adding that he would have no decision on the payment.

“The Justice Department represents Treasury. I would suggest you contact Justice” for further information, Bessent said in response to questions from Democratic Senator Ruben Gallego.

The Treasury routinely issues payments on spending decisions by other government agencies and for tax refunds and Social Security benefits without interference. But a year ago, as Trump unleashed the Elon Musk-led informal Department of Government Efficiency to cut government waste, Bessent granted the informal group access to the Treasury’s payments system on a “read-only” basis to try to identify fraud and abuse, sparking protests over privacy concerns and a lawsuit to stop the effort.

Trump sued the IRS and Treasury last week over the disclosure of his tax returns to the media in 2019 and 2020, during his first term, and Bessent said that some 440,000 other tax returns were also publicly leaked.

Gallego pressed Bessent on whether it would be a conflict of interest for the Treasury to issue a payment for damages to Trump – when the U.S. president has the power to fire Bessent – leading to the latest in a series of tense exchanges between the Treasury chief and Democratic lawmakers over two days of testimony on Capitol Hill.

“I think you’re confused, senator. I am not part of the decision,” Bessent said.

(Reporting by David Lawder and Andrea Shalal; Editing by Paul Simao)