The Justice Department has agreed to halt ongoing tax audits and related prosecutions involving President Trump, members of his family, and affiliated businesses as part of a broader settlement that also creates a $1.8 billion compensation fund for people who claim they were politically targeted by federal investigations.
A one-page addendum to the agreement, signed by acting Attorney General Todd Blanche, says the government is “FOREVER BARRED and PRECLUDED from prosecuting or pursuing” pending tax claims against Trump, his relatives, and his business entities.
The provision was added Tuesday alongside a separate settlement under which Trump agreed to drop a $10 billion lawsuit against the Internal Revenue Service. That lawsuit stemmed from the leak of Trump family tax returns during his first term. In exchange, the federal government is establishing a fund for individuals who say they were targeted by federal law enforcement or tax investigations because of their political or ideological views, according to The New York Times.
Federal law generally prohibits the president and other executive officials from ordering the IRS to begin or end specific audits, though certain exceptions exist for the attorney general. It remains unclear whether the audits covered by the agreement had already concluded or whether other examinations involving Trump or his affiliates remain active. IRS policy requires annual audits of sitting presidents’ tax returns.
The timing and low-profile release of the addendum intensified criticism that the administration was using official government action to resolve matters involving Trump’s private financial interests. Critics described the move as part of a broader pattern in which the line between public authority and personal benefit has become increasingly blurred.
Trump has long denied wrongdoing related to his tax filings. Prior reporting has indicated that an adverse outcome in a major IRS audit could have exposed him to more than $100 million in liability.
The original nine-page settlement, signed by IRS Commissioner Frank Bisignano, does not provide direct payments from the new fund to Trump or his family. But the separate immunity provision could still deliver significant financial relief if it shuts down pending tax disputes.
The broader deal has drawn unease even from some Republicans. Senate Majority Leader John Thune of South Dakota said he was “not a big fan” of the fund and did not see a clear purpose for it.
Blanche defended the arrangement Tuesday during a Senate appropriations subcommittee hearing. Sen. Chris Van Hollen, a Maryland Democrat, accused him of acting more like “the president’s personal attorney” than the nation’s top law enforcement official. Blanche responded by reaffirming that he was serving as acting attorney general.
The new compensation fund will be overseen by a five-person commission tasked with reviewing claims based on factors such as financial losses and time spent in federal custody. Disbursements are expected to occur largely outside public view, with confidential quarterly reports provided only to the attorney general. The program is scheduled to stop accepting claims on December 1, 2028, shortly before the end of Trump’s current term.
Throughout the Biden term, conservatives, including Trump, were often targeted by various government agencies, including the IRS. In 2023, for example, journalist Matt Taibbi announced that the IRS showed up at his front door for an “audit” days before he was scheduled to testify to Congress about the weaponization of the government under Joe Biden.
