Trump tax returns get protection from IRS under fund settlement

Federal tax returns filed before this week by President Donald Trump, his family members, the Trump Organization and related trusts and affiliates are shielded from possible enforcement action by the Internal Revenue Service under a controversial $1.8 billion settlement with the Justice Department, according to a new document released Tuesday.

As part of the agreement, the Justice Department prohibited the federal government from prosecuting or pursuing “any claims” that could be made by the IRS, including “tax returns” filed before the effective date of the agreement, according to the document signed by Acting Attorney General Todd Blanche.

The protection covers Trump, his family members, the Trump Organization and “parties, including trusts, parent, sister or related companies, affiliates and subsidiaries.”

Blanche is Trump’s former criminal defense attorney.

Documentfirst reported by PolicyIt is an addition to the terms of the settlement first announced by the Justice Department on Monday.

The Justice Department did not immediately respond to a request for comment on the addendum.

Sen. Ron Wyden, an Oregon Democrat, said the provision violates federal law that “prohibits executive branch officials from interfering with IRS audits.”

“Democrats will fight every element of this self-serving solution, but whatever the outcome of those efforts, future administrations and IRS leaders should completely invalidate this illegal directive,” said Wyden, the ranking member of the Senate Finance Committee. “No matter what Trump or his personal lawyer says, the Trump family is not above the law.”

The settlement resolved a $10 billion lawsuit filed by Trump, Donald Trump Jr., Eric Trump and their companies in Miami federal court against the IRS over the leak of Trump-related tax returns by an IRS employee.

On Monday, the Trumps dropped the case in exchange for the Justice Department agreeing to fund the Proliferation Fund with $1.8 billion. The fund was established to be used to compensate alleged victims of the department’s law enforcement actions under the Biden administration. The Trump administration has called such actions “statutory law.”

Democratic members of Congress have described the deal as a “slush fund” for Trump’s allies, including defendants convicted for their roles in the Jan. 6, 2021 riot, in which Trump supporters stormed the U.S. Capitol and disrupted the certification of former President Joe Biden’s election victory.

In testimony before the Senate appropriations subcommittee Tuesday morning, Blanche would not rule out allowing people convicted of assaulting police officers during the Jan. 6 insurrection to receive compensation from the fund.

The Justice Department said in a statement that Trump agreed Monday to drop two executive claims as part of the settlement, “including damages resulting from the illegal raid on Mar-a-Lago and the collusion hoax with Russia.”