The U.S. government permanently ceased its tax claims against former President Donald Trump, according to a settlement document released Tuesday. This action marks an unusual use of executive power, which may protect Trump from further scrutiny of his finances and legal actions. The settlement resolves a $10 billion lawsuit Trump filed against the Internal Revenue Service (IRS), following leaks of his tax returns.
Under this agreement, the United States is “forever barred and estopped” from examining or prosecuting Trump’s current tax audits, along with those of his children and the Trump Organization, as stated in a document on the Department of Justice website. The government is also prohibited from investigating Trump’s family, associates, and others, as outlined in a document signed by interim Attorney General Todd Blanche. This document is a separate annex from the original agreement disclosed on Monday and quietly added to the Department of Justice website on Tuesday.
The White House redirected inquiries from The Associated Press to the Department of Justice. The U.S. Treasury Department did not respond to requests for comment. According to the Department of Justice, this agreement only pertains to existing audits, not future ones. This decision follows the Trump administration’s announcement on Monday about a nearly $1.8 billion fund to compensate President Trump’s allies who believe they were investigated or prosecuted unfairly, deemed “corrupt” and unconstitutional by Democrats and government watchdogs.
The “Anti-Abuse Fund,” amounting to $1.776 billion, allows those who feel politically targeted—even by the Department of Justice under President Joe Biden—to apply for compensation. Blanche described this as “a legal process for victims of judicial abuse and their instrumentalization to be heard and seek compensation.” During a heated Capitol Hill hearing on Tuesday, Blanche did not rule out payments from the new fund to individuals involved in the January 6, 2021 Capitol assault.
Democratic legislators and ethics organizations criticized the fund, labeling it as corrupt and potentially serving as “a slush fund” for the president and allies. Some Republican lawmakers, including Senate Majority Leader John Thune, expressed discomfort with the fund, remarking he is “not a big fan.” Trump stated Monday at the White House the fund aims to “reimburse individuals who received horrible treatment.” Daniel Werfel, a former IRS commissioner during the Biden administration, said he was unaware of any cases where the IRS had “permanently waived its right to examine previously filed tax returns for a specific person or business.” He emphasized the arrangement gives Trump and his family distinct tax rules from other Americans.
“Whether you’re the president or Joe the plumber, people expect the same tax rules and compliance framework to apply to all,” Werfel stated. The fund’s announcement follows Trump, his sons Eric and Donald Jr., and the Trump Organization agreeing to drop their lawsuit against the IRS and Treasury Department. Their complaint claimed confidential tax document leaks caused reputational and financial harm, negatively impacting their public image. Per the original agreement issued Monday, Trump will receive a formal apology from the U.S. government, but “no monetary payment or compensation of any kind.” Nevertheless, dismissing potential current tax claims might provide Trump protection against any pending tax liabilities.
Judge Kathleen Williams dismissed the case Monday, reprimanding government agencies, particularly the Department of Justice, for lacking transparency in their agreement. Williams noted that no agency “submitted agreement documents or properly filed documents ensuring the agreement’s appropriateness when there was a pending question about whether there was an actual case or controversy.”
Reporter Alanna Durkin Richer from The Associated Press contributed to this report.
This story was translated from English by an AP editor with assistance from a generative AI tool.