Trump’s old taxes can’t be audited as part of IRS deal. That’s unprecedented — and hard to reverse

PolitiFact – Rulings and Stories — 2026-05-21 16:43:00 — www.politifact.com

Trump Settlement Halts Tax Audits Amid Controversy

An already controversial settlement of President Donald Trump’s lawsuit over leaked tax files would permanently halt existing tax audits of Trump and several associates. The Justice Department announced the move on May 19, a day after releasing details of a $1.776 billion fund to pay for claims of federal government “weaponization.” Critics have labeled this fund a “slush fund” for Trump supporters, including those convicted of crimes during the January 6, 2021, storming of the U.S. Capitol.

Details of the Settlement

The fund was designed to resolve a $10 billion lawsuit by Trump and his sons, Donald Jr. and Eric Trump, against the IRS, citing a leak of Trump-related tax materials. The settlement document, signed by Acting Attorney General Todd Blanche, states that the IRS will be “forever barred and precluded” from auditing the returns of Trump and related individuals, trusts, and businesses, as long as the returns were filed before May 18, 2026.

This sweeping closure of existing audits is unprecedented, and experts suggest it would not be easily challenged in court, by Congress, or by future administrations. Danny Werfel, who served as IRS commissioner from 2023 to 2025, remarked to Politico, “I am unaware of a single precedent where the IRS has agreed in advance to permanently forgo examination of previously filed tax returns for a specific person or business.”

Potential Financial Implications

The New York Times estimated that halting long-running audits of Trump’s finances could save him approximately $100 million. The audits were reportedly prompted by a $72.9 million tax refund Trump received starting around 2010. The settlement document also precludes “prosecuting or pursuing any and all claims, counterclaims, causes of action, appeals, or requests for any relief, including … monetary relief, damages, examinations or similar or related reviews, appeals, debt relief, costs, attorney’s fees, expenses and/or interest, whether presently known or unknown.”

Challenges to the Settlement

One significant obstacle to ending the legal protections for Trump and his associates would be finding someone with legal standing to challenge it. Experts indicate that locating someone harmed by relieving Trump and others of potential tax penalties is unlikely, as simply being a taxpayer does not constitute sufficient standing. Congress could attempt to block or amend certain provisions of the policy, but critics have not demonstrated the two-thirds majority required in both chambers to override an expected Trump veto.

The most feasible option for challenging the policy would be for a future administration to reverse it. Tax Law Center policy director Brandon DeBot stated, “The IRS could seek to void agreements with a showing of fraud, malfeasance, or misrepresentation of a material fact.” However, such efforts would face significant obstacles, including the Trumps’ ability to mount a legal defense.

Expert Opinions

New York University law professor Daniel Shaviro advised that if the next administration wanted to reverse the policy, they should “ignore it and go ahead with whatever proceedings against the plaintiffs they consider appropriate.” He added that while the Trumps would raise this as a defense, it does not guarantee that it would be upheld in court.

Former IRS Commissioner John Koskinen highlighted practical challenges, stating, “By the time a new IRS commissioner shows up, the (money from the contested tax returns) will be gone, and tracking it down will be difficult.”

Conclusion

The settlement of Trump’s lawsuit over leaked tax files raises significant questions about accountability and the implications of government actions perceived as favoring certain individuals. As the legal landscape evolves, the potential for future challenges remains, but the unprecedented nature of this settlement complicates the path forward. The implications of this settlement could reverberate through the political and legal systems, influencing public perception and trust in governmental processes.

Source: https://www.politifact.com/article/2026/may/21/trump-taxes-irs-audits-weaponization/