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5 things to know about the Trump IRS settlement

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by Julia Shapero - 05/20/26 6:36 PM ET

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by Julia Shapero - 05/20/26 6:36 PM ET

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The IRS reached a settlement with President Trump over the leak of his tax returns, barring the agency from auditing his previous filings and reigniting a years-long battle over Trump’s taxes.

Acting Attorney General Todd Blanche signed an order Tuesday declaring the IRS is “forever barred” from bringing claims against Trump based on his prior tax returns.

The settlement, which also creates a $1.776 billion “anti-weaponization” fund, comes on the heels of the president’s decision to drop his $10 billion lawsuit against the IRS.

The move was seen as an effort to sidestep a judge who had raised questions about whether the two sides were real adversaries, underscoring the unusual nature of the case that saw Trump sue his own administration.

Here are five things to know about the settlement:

Trump shielded from IRS probes based on old tax returns

The order signed by Blanche on Tuesday says the IRS “releases, waives, acquits and forever discharges” Trump from any potential action and is “forever barred and precluded” from pursuing any pending matters before the agency.

This includes “tax returns filed before the Effective Date” of the agreement.

“As is customary in settlements, both sides have executed waivers of a variety of claims that were or could have been brought,” a Justice Department spokesperson said in a statement.

“There would be little point in settling several significant claims if either party could simply turn around and seek to [initiate] more adverse claims that could have been pursued previously,” they continued, underscoring that it only applies to existing and not future audits.

As of 2024, Trump was battling an IRS audit that stretched back more than a decade and could potentially have cost him $100 million, according to The New York Times.

Settlement applies to Trump’s companies, family and trusts

The settlement has a wide remit, going beyond the president himself.

It covers Trump and his two oldest sons, Eric Trump and Donald Trump Jr., as well as the Trump Organization. All were listed as plaintiffs in the lawsuit against the IRS, which they brought in January over a series of leaks by a former IRS contractor between 2019 and 2020.

The agreement also applies to other connected parties, including family members, trusts, related companies, affiliates and subsidiaries.

Experts, critics question legality

Both the newly established “anti-weaponization” fund and the provision shielding prior tax returns from audits are drawing legal scrutiny.

A group of 93 House Democrats filed an amicus brief Monday, seeking to block the creation of the fund. It argued the court should dismiss the underlying lawsuit against the IRS because the president is on both sides of the case.

Two police officers who were working at the U.S. Capitol on Jan. 6, 2021, Harry Dunn and Daniel Hodges, are separately suing Trump over the fund, which they allege endangers their “lives and safety.”

The lawsuit comes as individuals who were charged for their role in the Jan. 6 riots and later received clemency from the president appear poised to seek payouts.

Dunn and Hodges argue the fund will encourage “those who enacted violence in the President’s name to continue to do so” and “directly finance the violent operations of rioters, paramilitaries, and their supporters who threatened Plaintiffs’ lives that day, and continue to do so.”

Brandon DeBot, policy director of the Tax Law Center at New York University, also suggested Monday that the “anti-weaponization fund” may not be a proper use of the Judgment Fund, which is money held at the Treasury Department to pay court judgments and settlements.

He noted Tuesday that the provision preventing audits of prior tax returns would require action by the IRS to be effective.

“The new release heightens concerns about potential criminal violations of the tax code’s protections against political interference given White House officials’ reported involvement in the settlement negotiations—which demand thorough investigation,” DeBot said in a statement.

“It purports to put the President, his entities, and his family above the tax laws—even though DOJ alone doesn’t have authority to offer those extraordinary protections,” he continued.

Even some Republican lawmakers have questioned the settlement. Senate Majority Leader John Thune (R-N.C.) said Tuesday he was “not a big fan” of the fund and doesn’t “see a purpose for that.”

Sen. Susan Collins (R-Maine) also pressed Blanche during his appearance before a Senate Appropriations subcommittee about the fact that settlements are not typically paid out for “future claims that have yet to be brought.” The acting attorney general responded by describing the fund as “unusual” but “not unprecedented.”