Justice Department Settlement Ends IRS Audits of Trump and Family

The Justice Department announced this week that its settlement of President Donald Trump's lawsuit over leaks of his tax returns blocks the IRS from reviewing filings made by Trump, his family and his businesses.

Some lawmakers and legal experts say the department violated federal law by adding a clause that ends current audits and investigations. The department says the clause is a standard waiver used in settlements.

Trump and his two eldest sons sued the IRS in January for $10 billion over the leaks. It was the first time a president had sued the US government.

On Monday the department said the suit was settled and the government would create an almost $1.8 billion fund to compensate people who believe they were unfairly investigated.

The next day the department released a one-page addendum that bars the IRS from filing claims, conducting examinations or seeking injunctive relief related to taxes filed by Trump, his family members and their trusts, companies or subsidiaries before 19 May 2026.

The department said the addendum covers only existing audits, not future ones. The IRS does not announce its investigations, so it is not known whether any reviews of the president or his businesses were under way.

Senate Finance Committee ranking member Ron Wyden said the addendum is a clear violation of the law that bars executive branch officials from interfering in IRS audits. He said Democrats will fight the settlement and that future administrations should treat the directive as invalid.

Under US law the president and most other high-ranking executive officials cannot directly or indirectly ask the IRS to end an investigation. The addendum was signed by Acting Attorney General Todd Blanche.

Public Citizen co-presidents Robert Weissman and Lisa Gilbert said Trump filed a bad-faith lawsuit and used the settlement to escape IRS audits. Tax Law Center Policy Director Brandon DeBot called the settlement a breathtaking abuse of the tax and legal system.

In exchange for dropping the case, the department agreed to set up a $1.776 billion Anti-Weaponization Fund to pay claims from people who say they suffered from weaponization and lawfare. Most Democrats have called it a slush fund.

Former Trump campaign adviser Michael R Caputo is seeking $2.7 million from the fund. Two police officers who were at the Capitol on 6 January 2021 filed a lawsuit Wednesday arguing the fund is illegal and could endanger their safety by paying rioters who threaten them.