IRS Audits

The Justice Department, under Acting Attorney General Todd Blanche, signed a sweeping addendum that at first glance seems to permanently bar the IRS from auditing or prosecuting President Trump, his family members, and affiliated businesses for tax returns filed prior to the agreement. This release of claims accompanied the creation of a nearly $1.8 billion compensation fund for victims of alleged “lawfare”.

The core details of the agreement are:

• IRS Immunity: The Department of Justice Settlement Agreement dictates that the U.S. government is forever barred and precluded from pursuing, prosecuting, or examining any tax-related claims against Trump, his adult sons, and the Trump Organization.
• The “Anti-Weaponization Fund”: The settlement Trump IRS Lawsuit Settlement established a $1.766 billion fund originating from the Judgment Fund to compensate individuals who claim they were unfairly targeted or prosecuted by the federal government.
• Commission Oversight: Distribution of the funds is handled by a five-member commission appointed by the Attorney General.

This has resulted in several likely long-term effects & controversies that include:

• Broad Eligibility Debated: During recent testimony on Capitol Hill, Blanche declined to restrict fund disbursements, confirming that even individuals convicted of violent crimes, such as participants in the January 6, 2021 Capitol riot who assaulted police, are eligible to apply.
• Ethical and Legal Pushback: Democratic lawmakers and government watchdogs have strongly condemned the deal, citing significant potential for self-dealing and a lack of judicial oversight, as the commission is controlled by the executive branch rather than a federal judge.
• Permanent Immunity Precedent: The retroactive immunity granted regarding prior tax returns effectively shuts down all pending IRS investigations into Trump-affiliated business entities, sparking fierce debate over the use of federal settlements to shield officials from existing civil and criminal inquiries. 6:13

Several respected legal experts, constitutional scholars, and lawmakers argue that the settlement quite likely violates multiple provisions of the U.S. Constitution. While the text states that the Trump family is “forever barred” from tax prosecution, the permanency of this immunity is legally fragile and susceptible to being overturned by future administrations or the federal court system.

The Legal watchdogs and Democratic members of Congress have already flagged several constitutional boundaries that this settlement appears to breach:

• The Appropriations Clause (Article I, Section 9): Congress possesses the exclusive “power of the purse”. Opponents argue that bypassing Congress to divert nearly $1.8 billion from the federal Judgment Fund to create a brand-new administrative program violates separation of powers.
• The Domestic Emoluments Clause (Article II, Section 1): This clause prohibits the President from receiving any financial benefit from the federal or state governments beyond their official salary. Citizens for Responsibility and Ethics in Washington (CREW) noted that using a settlement to absolve the President’s personal businesses of potentially hundreds of millions in tax liabilities may constitute an illegal emolument.
• The Fourteenth Amendment (Section 3): Lawmakers warn that if the “Anti-Weaponization Fund” provides taxpayer-funded compensation to individuals who engaged in the January 6th Capitol riot, it could violate constitutional bans against giving aid or comfort to insurrectionists.

Additionally, while the addendum signed by Todd Blanche uses absolute terms like “forever barred and precluded”, its permanent status is highly contested under existing legal precedents:

• Executive Authority Limitations: A sitting president generally cannot bind future administrations from enforcing federal law. If a future administration determines that the contract was signed under a conflict of interest—or amounted to self-dealing; the Department of Justice could declare the agreement void.
• Lack of Judicial Review: Because this was an administrative settlement hammered out between the President and agencies he ultimately oversees, it did not undergo the rigorous fact-finding or approval of an independent federal judge. This absence of a court order leaves the contract highly vulnerable to lawsuits.
• Civil and State Carveouts: The settlement only binds the federal government (the IRS and DOJ). It provides absolutely no protection against state-level tax audits or criminal prosecutions, such as actions by the New York State Department of Taxation or local district attorneys.

The Bottom Line: Over 100 members of Congress and numerous ethics organizations are already preparing or pursuing litigation. If the federal courts rule that the agreement was an unconstitutional abuse of executive power, the entire settlement—including the family’s tax immunity—will, in my opinion, be struck down