Experts question deal granting Trump immunity from IRS audits

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The Internal Revenue Service agreed to drop pending probes into whether Donald Trump properly paid his federal taxes, resolving a lawsuit Trump brought after The New York Times published his tax returns, according to an Associated Press report published May 22. The settlement terms, released in a one-page document, include language that would bar the government from examining or prosecuting Trump and his family over current tax filings, experts said the outcome is highly unusual.

The IRS probe was tied to an alleged tax strategy that could have produced a large additional tax bill if the IRS found wrongdoing, with the experts characterizing the settlement as effectively removing that risk. In the reporting, the matter centered on questions raised about whether Trump “doubled-dipped” by using losses to cut taxes in more than one set of future filings.

Under the settlement resolving Trump’s $10 billion lawsuit over the 2018 leak of his tax returns to The New York Times, the U.S. is described in the released document as “forever barred and precluded” from examining or prosecuting Trump, his sons and the Trump Organization’s current tax filings. The Associated Press report said the document also pointed to an earlier $1.8 billion fund meant to compensate people whom Trump believed were improperly investigated by the government.

Former IRS Commissioner Daniel Werfel said the remedy is unusually sweeping and that Trump should be treated like other Americans. Werfel told the Associated Press that the agreement represented “an unprecedented remedy,” adding that “People expect the same tax rules and enforcement framework to apply to everybody.”

Tax expert Brandon DeBot also criticized the settlement’s practical impact, saying it amounted to extraordinary action by the Justice Department as it moved to resolve the case. In remarks to the Associated Press, DeBot described the outcome as “extraordinary action” and said the message it sends to the country was that “This is giving the president and his affiliates completely different set of rules than everyday taxpayers.”

The reporting said the underlying IRS probe involved whether Trump used the same losses from a Chicago skyscraper to reduce taxes in multiple future filings, and it noted that the question had been described in a 2024 report by The New York Times and ProPublica. The report said that if Trump lost the audit, he could have owed more than $100 million, including penalties.

Trump, through the settlement and in related statements, has repeatedly denied he did anything wrong and has said the investigation was politically motivated. The Associated Press report said Trump’s position has not included proof supporting that claim, and it also noted that details of IRS audits are not public, making it difficult to assess the merits of each side’s arguments.

The Associated Press report said the settlement addresses existing audits, not future examinations, describing it as a bar aimed at the current tax filings rather than an open-ended exemption. Even so, legal questions are still surrounding parts of the broader settlement package, including court challenges that include suits by police officers who helped defend the U.S. Capitol during the Jan. 6, 2021, attack over efforts to block payouts from the compensation fund.

Some law experts expect the tax immunity terms themselves to face challenges as well. In comments carried by the Associated Press, DeBot said Trump was “trying to play every role in the system, acting as plaintiff, defendant, and his own judge and jury to extract extraordinary windfalls,” adding that broad immunity “stretches beyond what DOJ actually has authority to do.”

The broader dispute also sits in a longer history of presidents and IRS scrutiny. The Associated Press report said Trump has hinted he may release his tax returns but has previously refused to do so while saying he cannot during an IRS audit, while pointing to a longstanding IRS policy under which presidential returns have been audited voluntarily for decades, including following a post-Watergate crackdown after Richard Nixon sought deductions that led to underpayment questions.

Even as Trump has challenged the IRS in an unusually direct way, the Associated Press report said the process itself included multiple departures from normal practice, with experts describing the settlement route as rare. The report described Trump suing the IRS—an agency within the executive branch he leads—and then, in a further unusual step, receiving immunity as part of the resolution.

As the case continues to work its way through the courts on related terms, experts say the settlement’s reach could become a central public concern: whether tax enforcement rules and scrutiny should apply uniformly to presidents and other taxpayers, regardless of the outcome of any future legal challenges.