The U.S. government will permanently drop tax claims against President Donald Trump, according to a settlement document made public Tuesday in a widening deal tied to Trump’s $10 billion lawsuit against the Internal Revenue Service over the leak of his tax returns. The settlement says the U.S. is “forever barred and precluded” from examining or prosecuting Trump, his sons and the Trump organization’s current tax issues, a sweeping carve-out that places one man and his family under a different enforcement regime than everyone else.
Who Gets Protected
The arrangement comes after the Trump administration announced Monday the creation of a nearly $1.8 billion fund as part of the lawsuit settlement to compensate allies of the Republican president who believe they have been unjustly investigated and prosecuted. The $1.776 billion Anti-Weaponization Fund will allow people who believe they were targeted for prosecution for political purposes, including by the Biden administration Justice Department, to apply for payouts. Acting Attorney General Todd Blanche called it “a lawful process for victims of lawfare and weaponization to be heard and seek redress.”
Blanche, who was grilled by lawmakers on Capitol Hill on Tuesday, would not rule out the possibility that people who carried out violence during the Jan. 6, 2021, riot at the U.S. Capitol will be considered for payouts from the new fund. That possibility hangs over a program presented as redress, while the people at the bottom of the political machinery are told to wait for whatever the apparatus decides they deserve.
Who Pays the Price
Democrats and government watchdogs derided the arrangement as “corrupt” and unconstitutional. Democratic lawmakers and ethics watchdogs said the fund was corrupt, opaque and had the potential to become a “slush fund” for the president and his allies. Even Republican lawmakers expressed signs of discomfort about the fund’s creation, including Senate Majority Leader John Thune, who told reporters that he’s “not a big fan.”
Trump told reporters at the White House on Monday that the fund is dedicated to “reimbursing people who were horribly treated.” But the settlement document says the U.S. government will permanently drop tax claims against him, while a separate settlement agreement posted to the Justice Department website Monday says Trump will receive a formal apology from the U.S. government but “will not receive any monetary payment or damages of any kind” from the settlement.
Daniel Werfel, a former IRS Commissioner during the Biden administration, said he was unaware of the IRS agreeing in advance “to permanently forgo examination of previously filed tax returns for a specific person or business.” He said the arrangement granted Trump and his family separate tax rules from other Americans. “Whether you are the president or Joe the Plumber, people expect the same tax rules and enforcement framework to apply to everybody.”
What the Agencies Said — and Didn’t Say
The White House referred Associated Press inquiries to the Justice Department, and the U.S. Treasury did not respond to Associated Press requests for comment. The Justice Department said the settlement refers only to existing audits, not future examinations. That distinction sits inside a deal that, on its face, bars the government from examining or prosecuting Trump, his sons and the Trump organization’s current tax issues.
The fund was announced after Trump, his sons Eric Trump and Donald Trump Jr., and the Trump Organization agreed to drop their lawsuit against the IRS and the Treasury Department. The lawsuit alleged that a leak of confidential tax records caused them reputational and financial harm and negatively affected their public standing, among other allegations.
According to the separate settlement agreement, the government’s apology comes without cash changing hands for Trump, but the broader settlement still shields him from tax claims and opens a new payout mechanism for allies who say they were targeted. Kathleen Williams, the judge handling the lawsuit, dismissed the case on Monday and, in her filing, admonished the government agencies, notably the Justice Department, for failing to be transparent about the settlement. She said no agency “submitted any settlement documents nor filed any documents ensuring that settlement was appropriate where there was an outstanding question as to whether an actual case or controversy existed.”
The result is a deal assembled inside the machinery of the state, with the state itself deciding who gets protected, who gets heard, and who gets paid. Associated Press writer Alanna Durkin Richer contributed to this report.