U.S. to Withdraw Tax Claims Against Trump in Settlement

The United States government has announced the permanent withdrawal of its tax claims against former President Donald Trump, according to a settlement document released on Tuesday. This action represents an extraordinary use of executive power, potentially shielding the former president from further scrutiny of his finances and legal conduct.

As part of a settlement to resolve a $10 billion lawsuit filed by Trump against the Internal Revenue Service (IRS) over the leak of his tax returns, the U.S. government is now “forever barred and enjoined” from examining or prosecuting the current tax audits of Trump, his children, and the Trump Organization. This information was disclosed in a document on the Department of Justice’s website.

The agreement also prohibits federal investigations into Trump’s family, associates, and others, as stated in the document signed by Acting Attorney General Todd Blanche. This document serves as an additional annex to the original settlement announced on Monday, quietly added to the Department of Justice’s website on Tuesday.

The White House referred inquiries from The Associated Press to the Department of Justice, while the U.S. Treasury Department did not respond to requests for comment.

The Justice Department clarified that the agreement pertains only to existing audits, not future ones. This development occurred after the Trump administration announced on Monday, as part of the lawsuit settlement, the creation of a nearly $1.8 billion fund to compensate the former president’s allies who believe they were unfairly investigated and prosecuted. Democrats and governmental oversight entities have criticized this pact as corrupt and unconstitutional.

The Anti-Abuse Fund, totaling $1.776 billion, allows individuals claiming to be subjects of politically motivated prosecutions, including those by the Justice Department under President Joe Biden, to seek payments. Blanche described this initiative as a “legal process for the victims of judicial overreach to be heard and seek redress.” During a heated congressional inquiry Tuesday, Blanche did not rule out that individuals involved in the January 6, 2021, Capitol attack could be eligible for payments from the new fund.

Democratic lawmakers and ethics organizations condemned the fund’s creation, labeling it corrupt and warning of its potential to become a slush fund for Trump and his allies. Some Republican legislators, including Senate Majority Leader John Thune, expressed discomfort with the fund, saying, “I’m not a big fan.” On Monday, Trump stated that the fund was established to “reimburse individuals who received terrible treatment.”

Daniel Werfel, former IRS Commissioner during the Biden administration, pointed out that he was unaware of any cases where the IRS had previously agreed to “permanently forgo examining returns filed by any specific individual or company.” He stated that the agreement provides Trump and his family with different tax rules than other Americans.

“Whether you are the president or Joe the plumber, people expect the same tax rules and enforcement framework to apply to everyone,” Werfel noted.

The announcement of the fund followed the decision by Trump, his sons Eric Trump and Donald Trump Jr., and the Trump Organization to drop their lawsuit against the IRS and the Department of the Treasury. The lawsuit claimed that a leak of confidential tax filings damaged their reputations and finances and negatively affected their public image.

According to the original agreement published on Monday on the Justice Department’s website, Trump will receive a formal apology from the U.S. government. However, he will not receive any monetary payment or compensation as part of the settlement. Even so, the removal of potential current tax claims could offer him protection from any outstanding tax liabilities.

Judge Kathleen Williams dismissed the case on Monday, criticizing government agencies, particularly the Justice Department, for lacking transparency in their settlement agreement. Williams noted that no agency “submitted settlement documents or recorded documents ensuring the settlement’s appropriateness when there existed a pending doubt about the case’s or controversy’s actuality.”

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Associated Press journalist Alanna Durkin Richer contributed to this report.

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This story was translated from English by an AP editor with the assistance of a generative AI tool.