The US Department of Justice (DOJ) on Tuesday quietly expanded President Donald Trump's settlement with the Internal Revenue Service (IRS), issuing a one-page addendum that permanently blocks the tax agency from examining his past returns, his family's filings, and the books of his businesses.
A Sweeping Shield Added After the Deal
Acting Attorney General Todd Blanche, who previously served as Trump's personal defence lawyer, signed the directive and posted it to the DOJ website. The document declares the federal government 'forever barred and precluded' from pursuing any claims, examinations, or reviews tied to tax returns filed before the settlement's effective date of 18 May 2026.
The addendum was not included in the original nine-page agreement released Monday, which created a $1.77 billion (£1.32 billion) 'Anti-Weaponization Fund' after Trump withdrew his $10 billion (£7.5 billion) lawsuit against the IRS over a contractor's leak of his confidential tax records. The new language goes further, folding Trump's long-running tax disputes into the deal and granting a blanket release from federal tax liability for a wide circle of related individuals, trusts, and entities.
What the Settlement Could Be Worth to Trump
The financial stakes are significant. In 2024, an investigation by The New York Times and ProPublica found that a years-long IRS audit of Trump's Chicago tower tax claims could produce a bill exceeding $100 million (£75 million). When the House Ways and Means Committee released six years of his returns in 2022, the filings showed Trump paid just $750 (£560) in federal income tax in both 2016 and 2017 after reporting tens of millions in losses, and paid nothing in 2020.
With the addendum now in place, those open questions about Trump's past tax obligations may never be resolved.
Tax Experts Say Past-Year Blocks Weaken Future Enforcement
The DOJ has insisted the waiver applies only to existing audits and not to future filings. But tax professionals say that distinction is less meaningful than it sounds.
Sherman Standberry, a prominent certified public accountant and chief executive of My CPA Coach, told Newsweek the order is 'highly unusual' and unlike anything he has seen in federal tax administration. He warned that because 'tax returns are correlated' and losses carry forward across years, blocking examination of earlier filings effectively weakens the IRS's ability to challenge later ones.
Brandon DeBot, policy director at NYU School of Law's Tax Law Center, went further, calling the arrangement a 'breathtaking abuse of the tax and legal system' and arguing the DOJ doesn't have the authority to offer such broad protections.
A Two-Tier System for Taxpayers
For the millions of ordinary Americans who file their returns every April and worry about being audited, the settlement raises a basic fairness question. No average taxpayer can direct their own Justice Department to settle a lawsuit and permanently shield their filings from review.
Senator Jack Reed, a Democrat from Rhode Island, said Trump effectively 'negotiated with himself' because the IRS, the DOJ, and the plaintiff all answer to the same person. He called Blanche 'the president's consigliere.'
A group of House Democrats described the broader settlement as 'collusive litigation' that would violate the separation of powers and the Domestic Emoluments Clause.
Standberry cautioned that shielding any taxpayer from future examinations could erode public trust and create 'a precedent of IRS protection and room for misuse.' But he also acknowledged the privacy breach at the heart of the case was serious, adding that 'no taxpayers should have their sensitive data leaked.'
The distinction between an ordinary audit closure and what Trump received, Standberry said, is stark. A routine audit ending does not prevent future scrutiny. A legally binding prohibition does.
