The U.S. government has been permanently barred from examining President Donald Trump, his sons, and the Trump Organization's tax returns, according to a settlement document made public on Tuesday, May 19. This extraordinary use of executive power could effectively shield the president from further scrutiny of his finances and legal conduct.
Settlement Details
As part of the deal to resolve Trump's $10 billion lawsuit against the Internal Revenue Service over the leak of his tax returns, the U.S. is "forever barred and precluded" from examining or prosecuting Trump, his sons, and the Trump Organization's current tax examinations. The one-page document, posted to the Justice Department's website, is signed by acting Attorney General Todd Blanche. It also bars the government from investigating Trump's family, affiliates, and others.
This addendum was quietly added to the Justice Department website on Tuesday, separate from the original settlement announced Monday. The White House referred inquiries to the Justice Department, while the U.S. Treasury did not respond to requests for comment. The Justice Department stated that the settlement applies only to existing audits, not future examinations.
Anti-Weaponization Fund
The move follows the Trump administration's announcement on Monday of a nearly $1.8 billion fund to compensate allies of the Republican president who believe they were unjustly investigated and prosecuted. The "Anti-Weaponization Fund" of $1.776 billion will allow individuals who claim they were targeted for political reasons, including by the Biden administration's Justice Department, to apply for payouts. Blanche described it as "a lawful process for victims of lawfare and weaponization to be heard and seek redress."
During a Capitol Hill hearing on Tuesday, Blanche did not rule out the possibility that people involved in the January 6, 2021, Capitol riot could receive payouts from the fund.
Criticism and Reactions
Democratic lawmakers and ethics watchdogs criticized the fund as corrupt, opaque, and a potential "slush fund" for the president and his allies. Even some Republicans, including Senate Majority Leader John Thune, expressed discomfort, telling reporters he is "not a big fan." Trump told reporters on Monday that the fund is for "reimbursing people who were horribly treated."
Daniel Werfel, former IRS Commissioner under the Biden administration, said he was unaware of any instance where the IRS agreed in advance to permanently forgo examination of previously filed tax returns for a specific person or business. He noted that the arrangement grants Trump and his family separate tax rules from other Americans, undermining the principle that everyone should be subject to the same tax enforcement framework.
Lawsuit Resolution
The fund was established after Trump, his sons Eric Trump and Donald Trump Jr., and the Trump Organization dropped their lawsuit against the IRS and Treasury Department. The lawsuit alleged that a leak of confidential tax records caused reputational and financial harm. Under the original settlement, Trump will receive a formal apology from the U.S. government but no monetary payment or damages.
However, the discharge of current potential tax claims could protect Trump from any outstanding tax liabilities. Judge Kathleen Williams, who dismissed the case on Monday, criticized the government agencies for failing to be transparent about the settlement. She noted that no agency submitted settlement documents or ensured the settlement was appropriate given questions about whether an actual case or controversy existed.
