President Donald Trump’s fight with the Internal Revenue Service over the leak of his tax returns has taken a new turn after the U.S. government disclosed an expanded settlement addendum that would bar further tax claims tied to the president’s current examinations, according to a document posted Tuesday by the Justice Department.
The document says the U.S. will permanently drop tax claims against Trump, and it uses broad language intended to prevent the government from reopening or escalating matters covered by the deal. In the settlement addendum, signed by Acting Attorney General Todd Blanche, the government is “forever barred and precluded” from examining or prosecuting Trump, his sons and the Trump organization’s current tax examinations.
The addendum also spells out limits that go beyond the president and his business. It says the government is barred from looking into Trump’s family, affiliates and other related parties, according to the settlement document posted on the Justice Department website.
The settlement stems from Trump’s lawsuit against the IRS over the alleged disclosure of confidential tax records. The case, filed by Trump and related parties and seeking $10 billion, was designed to resolve claims that a leak caused reputational and financial harm and negatively affected Trump’s public standing, among other allegations.
The new addendum came separately from the original settlement announced Monday, and it was added to the Justice Department website on Tuesday. The White House referred Associated Press inquiries about the expanded settlement to the Justice Department, and the U.S. Treasury did not respond to requests for comment, according to the report.
The Justice Department said the expanded settlement refers only to existing audits and not to future examinations. In response to a request for comment on the broader terms, the Justice Department described the scope as limited to audits already underway, rather than extending a blanket bar into later tax probes.
The settlement and its expanded discharge of possible tax claims arrived after the Trump administration announced what it called the “Anti-Weaponization Fund,” a nearly $1.8 billion pool intended to provide payouts to people who said they were unfairly investigated or prosecuted for political reasons. The fund’s size was described as $1.776 billion, and the administration said it would create what Blanche called “a lawful process for victims of lawfare and weaponization to be heard and seek redress.”
Critics, including Democratic lawmakers and government watchdogs, said the arrangement was corrupt, opaque and unconstitutional, with some warning that it could become a “slush fund” for the president and his allies. Even some Republican lawmakers expressed discomfort with the fund, including Senate Majority Leader John Thune, who told reporters he was “not a big fan,” according to the report.
Blanche also declined to rule out a possibility that people who used violence during the Jan. 6, 2021, riot at the U.S. Capitol could be considered for payouts from the fund, the report said. Trump said Monday that the fund is dedicated to “reimbursing people who were horribly treated,” according to the report.
Daniel Werfel, a former IRS commissioner during the Biden administration, said he was not aware of instances in which the IRS agreed in advance “to permanently forgo examination of previously filed tax returns for a specific person or business.” Werfel said the arrangement granted Trump and his family separate tax rules from those applied to other Americans, and he added that “Whether you are the president or Joe the Plumber, people expect the same tax rules and enforcement framework to apply to everybody.”
In court, the lawsuit was dismissed Monday by U.S. District Judge Kathleen Williams. In her filing, she admonished the government agencies, including the Justice Department, for failing to be transparent about the settlement, writing that no agency had “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.” She dismissed the case while noting those concerns about the process, according to the report.
The original settlement agreement posted to the Justice Department website Monday said Trump would receive a formal apology but “will not receive any monetary payment or damages of any kind” from the settlement. Even without money tied directly to the apology, the government’s discharged tax claims could limit what authorities pursue in matters covered by the addendum, the report said.