The Department of Justice released a settlement addendum Tuesday permanently barring the IRS from auditing the past tax returns of President Donald Trump and his adult sons, just one day after the administration unveiled a $1.776 billion “Anti-Weaponization Fund” geared toward alleged victims of government abuse.
Acting Attorney General Todd Blanche signed the one-page order, which states the IRS “releases, waives, acquits” any pending claims against Trump, his family, or the Trump Organization and is “forever barred and precluded” from pursuing claims tied to tax returns filed before Monday’s settlement agreement.
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The addendum stems from Trump’s now-dismissed $10 billion lawsuit against the IRS over the leak of his confidential tax records during the Biden administration. In exchange for dismissing the suit, the DOJ agreed to establish a new compensation fund aimed at individuals who allege they were unfairly targeted by prior administrations.
The settlement also sidesteps scrutiny from a federal judge who recently questioned whether Trump and the DOJ were truly adversarial parties, a requirement for maintaining the lawsuit.
A DOJ spokesperson defended the agreement Tuesday, saying the waiver language was standard settlement practice.
“As is customary in settlements, both sides have executed waivers of a variety of claims that were or could have been brought,” the spokesperson said. “This is only with respect to existing audits, not future.”
The Trump Organization and his eldest sons, Donald Trump Jr. and Eric Trump, are beneficiaries of the prior tax audit exemption because they were plaintiffs in the case. Neither Trump nor his adult children will receive direct compensation from the fund but are expected to receive a formal apology.
A 2022 investigation by the House Ways and Means Committee revealed that the IRS failed to properly enforce a long-standing policy to conduct annual audits during Trump’s first term in office. This legal settlement effectively closes the door on the IRS ever finishing or initiating further examinations into his past tax filings. It is also unclear whether there are any such audits currently under IRS review.
During his presidential campaigns and prior presidency, Trump repeatedly declined to release his tax returns while citing the ongoing audits. Previous reporting from the New York Times and ProPublica found the IRS had been examining deductions and tax strategies that could have exposed Trump to roughly $100 million in liabilities.
Representatives for Trump fiercely pushed back following the May 2024 reports, calling the scrutiny a politically motivated hit job. Eric Trump, executive vice president of the Trump Organization, said at the time that the tax matter “was settled years ago, only to be brought back to life once my father ran for office.” Trump’s legal team has argued that the complex deductions were entirely legal and backed at the time by top tax experts, including a former IRS general counsel.
The underlying leak at the center of Trump’s lawsuit traces back to former Booz Allen Hamilton contractor Charles Littlejohn, who pleaded guilty in 2023 to unlawfully disclosing Trump’s tax records and thousands of other confidential IRS files. Prosecutors said Littlejohn sought access to Trump’s returns because he viewed the president as “dangerous and a threat to democracy.” He previously leaked tax information connected to thousands of wealthy U.S. residents to ProPublica.
TODD BLANCHE: DOJ ‘ANTI-WEAPONIZATION’ FUND EXTENDS BEYOND BIDEN-CAUSED HARMS
The scope of the breach turned out to be far larger than initially understood. The IRS disclosed last year it had notified roughly 405,427 taxpayers whose information was improperly accessed or leaked by Littlejohn, far surpassing earlier public estimates, according to a letter sent to Rep. Jim Jordan (R-OH).
Democrats blasted the arrangement after Blanche defended the fund during congressional testimony earlier Tuesday. Rep. Jamie Raskin (D-MD) called the settlement a “racket,” while Sen. Elizabeth Warren (D-MA) described it on X as “corruption on steroids” and a “giant slush fund of taxpayer dollars for his MAGA buddies.”
