WASHINGTON — Acting Attorney General Todd Blanche has announced the termination of a $1.8 billion fund established to compensate individuals claiming to have been targeted by Democratic officials, while simultaneously maintaining significant protections for former President Donald Trump and his affiliates against Internal Revenue Service (IRS) audits.
The announcement came after weeks of negotiations and clarified certain limits on the previously broad immunity granted to Trump, his family, and their businesses from IRS examination. Despite some adjustments, Trump retains an unprecedented level of protection from IRS scrutiny, a benefit not afforded to any prior president or ordinary taxpayer. This shields him from audits related to aggressive tax strategies he has employed over the years.
The protections stem from a settlement of a lawsuit Trump filed in January against the IRS, concerning alleged unauthorized disclosure of his tax information during his first presidential term. Initially, Trump sought at least $10 billion in damages, but the Justice Department instead offered audit immunity to resolve the case without contesting Trump’s claims. The lawsuit covers Trump, his sons Donald Trump Jr. and Eric Trump, and the Trump Organization, defined in the suit as including 419 entities, though many remain unspecified.
The sweeping nature of the audit protection raised concerns even among some Senate Republicans, who pressed for clarifications. Senators John Cornyn of Texas and Thom Tillis of North Carolina, who had previously withheld support for Blanche’s confirmation pending changes, indicated satisfaction with the revisions and voted to advance his nomination through the Senate Judiciary Committee. The amendments specify that the protections apply only to plaintiffs in Trump’s lawsuit and only to returns already filed, allowing for potential IRS examination of future tax filings.
Critics have voiced concern over the scope and legality of the immunity. Senator Elizabeth Warren, a Massachusetts Democrat, questioned whether companies related to the Trump family were claiming exemption from IRS audits. Several companies denied such claims, but others did not respond. Meanwhile, a federal judge in Miami overseeing the case described the settlement as a dubious arrangement, but said she lacked authority to intervene.
Legal experts note unresolved questions about the acting attorney general’s authority to direct IRS procedures, given the agency operates under the Treasury Department. Federal law prohibits presidential interference in IRS audits, with a narrow exception for the attorney general. However, future IRS agents could face legal jeopardy for following Blanche’s directive.
Complicating matters, the Treasury Department’s general counsel resigned the day the settlement was announced, and the acting top lawyer at the IRS, Ken Kies—who recused himself from Trump-related matters due to prior work for him—was recently removed. Trump’s preferred successor to Kies also previously served as his tax lawyer.
The IRS has declined to comment on whether it is implementing Blanche’s directives. The arrangement leaves many legal and procedural questions unresolved as Trump retains one of the most comprehensive forms of audit protection ever granted to a sitting or former president.