US government agrees to drop tax claims against Trump in broadening of
IRS lawsuit settlement
[May 20, 2026]
By FATIMA HUSSEIN
WASHINGTON (AP) — The U.S. government will permanently drop tax claims
against President Donald Trump, according to a settlement document made
public Tuesday, in an extraordinary use of executive power that could
effectively help shield the president from further examination of his
finances and legal conduct.
As part of the settlement deal meant to resolve Trump’s $10 billion
lawsuit against the Internal Revenue Service over the leak of his tax
returns, the U.S. is “forever barred and precluded” from examining or
prosecuting Trump, his sons and the Trump organization’s current tax
examinations, according to a one-page document posted to the Justice
Department's website.
The government is also barred from looking into Trump's family,
affiliates and others, according to the document, which is signed by
acting Attorney General Todd Blanche. That document is a separate
addendum from the original settlement announced Monday, and was quietly
added to the Justice Department website on Tuesday.
The White House referred Associated Press inquiries to the Justice
Department, and the U.S. Treasury did not respond to Associated Press
requests for comment.
The settlement refers only to existing audits, not future examinations,
the Justice Department said in response to a request for comment on the
expanded settlement.
The move comes after the Trump administration announced Monday, as part
of the lawsuit settlement, the creation of a nearly $1.8 billion fund to
compensate allies of the Republican president who believe they have been
unjustly investigated and prosecuted, an arrangement that Democrats and
government watchdogs criticize as “corrupt” and unconstitutional.
The “Anti-Weaponization Fund” of $1.776 billion will allow people who
believe they were targeted for prosecution for political purposes,
including by the Biden administration Justice Department, to apply for
payouts, creating what Blanche called “a lawful process for victims of
lawfare and weaponization to be heard and seek redress.”
Blanche, who was grilled by lawmakers on Capitol Hill on Tuesday, would
not rule out the possibility that people who carried out violence during
the Jan. 6, 2021, riot at the U.S. Capitol will be considered for
payouts from the new fund.
Democratic lawmakers and ethics watchdogs slammed the creation of the
fund, saying it was corrupt, opaque and had the potential to become a
“slush fund” for the president and his allies. Even Republican lawmakers
have expressed signs of discomfort about the fund's creation, including
Senate Majority Leader John Thune, who told reporters that he’s “not a
big fan."
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A sign outside the Internal Revenue Service building is photographed
May 4, 2021, in Washington. (AP Photo/Patrick Semansky, File)
Trump told reporters at the White House on Monday that the fund is
dedicated to “reimbursing people who were horribly treated.”
Daniel Werfel, a former IRS Commissioner during the Biden
administration, said he was unaware of instances where the IRS agreed in
advance “to permanently forgo examination of previously filed tax
returns for a specific person or business.”
He said the arrangement granted Trump and his family separate tax rules
from other Americans.
"Whether you are the president or Joe the Plumber, people expect the
same tax rules and enforcement framework to apply to everybody.”
The fund was announced after Trump, his sons Eric Trump and Donald Trump
Jr., and the Trump Organization agreed to drop their lawsuit against the
IRS and the Treasury Department. The lawsuit alleged that a leak of
confidential tax records caused them reputational and financial harm and
negatively affected their public standing, among other allegations.
According to the original settlement agreement posted to the Justice
Department website Monday, Trump will receive a formal apology from the
U.S. government but “will not receive any monetary payment or damages of
any kind” from the settlement. Still, the discharge of current potential
tax claims could provide protection against any possible outstanding tax
liabilities.
Kathleen Williams, the judge handling the lawsuit, dismissed the case on
Monday and, in her filing, admonished the government agencies, notably
the Justice Department, for failing to be transparent about the
settlement.
She said no agency “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.”
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Associated Press writer Alanna Durkin Richer contributed to this report.
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