Trump And His Family’s Tax Records Will Never Be Probed Again. Here’s Why

The US Justice Department has gone and expanded this controversial settlement tied to President Donald Trump’s lawsuit about the leaking of his tax returns, and it adds a line that, in practice, blocks the Internal Revenue Service (IRS) from going after certain existing tax examinations involving Trump, his family members, and those related business entities too. According to a report by Politico, The original nine page settlement agreement, released Monday, set up a nearly $1.8 billion fund meant to compensate people described as ‘victims of weaponization’ by federal law enforcement agencies. Still, at first, the agreement said nothing about Trump’s tax problems, or the ongoing IRS audits. Those audits Trump has kept saying were politically motivated and also dragged out longer than they should have been.  

What More Does The Report Say?

Then Tuesday, the Justice Department posted a separate one page addendum quietly, and it spells out that the IRS would be ‘forever barred and precluded’ from continuing examinations connected to tax returns submitted before the settlement went into effect. Reports say the waiver applies not just to Trump as a person, but also to affiliated people, trusts, and businesses connected to him. Acting Attorney General Todd Blanche signed the addendum, however it did not come with signatures from IRS officials or from Trump’s current legal team. Later, the Justice Department explained that this part was meant only for audits already underway, and it would not stop future tax examinations. Officials said that kind of language is pretty normal in huge settlements, so neither side, right away, starts new legal wrangling over the same underlying dispute, or something adjacent to it.

How Did Former IRS Officials React?

The agreement quickly triggered criticism from former IRS officials and ethics observers, who said the whole arrangement could mess with public trust in the independence of the tax system. Former IRS Commissioner John Koskinen called the decision a ‘terrible precedent’, implying it might foster the idea that politically powerful people get preferential handling. Another former IRS Commissioner, Danny Werfel, noted he was unaware of any prior situation where the IRS had agreed in advance to permanently stop scrutinizing previously filed tax returns for a specific person or business. Critics also asked why the addendum came out separately from the main settlement paper and why it didn’t have signatures from all the involved parties.

What Is ‘Anti Weaponization Fund’?

The controversy showed up while Blanche testified before a Senate Appropriations subcommittee, with lawmakers questioning both the wider settlement and the newly created ‘Anti Weaponization Fund’. Even so, senators reportedly did not directly take up the tax audit waiver during the hearing, or at least not in a straightforward way. Associate Attorney General Stanley Woodward later defended the settlement, saying the Justice Department already had broad power to settle claims against the federal government. Woodward also brushed aside worries that the fund could turn into a political ‘slush fund’, and urged observers not to jump too fast on what the agreement might mean long term. Still, this odd waiver has been ramping up attention about how the administration is dealing with Trump related legal and financial matters.

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