New settlement term bars IRS from investigating Trump, his family for past tax issues

CNN

By Tierney Sneed and Hannah Rabinowitz, CNN

(CNN) — The Internal Revenue Service can’t bring claims against President Donald Trump, his family or businesses for past tax issues, according to additional terms added Tuesday to the settlement the Justice Department reached with Trump to resolve his $10 billion lawsuit against the IRS.

The additional terms, first reported by Politico, were quietly added in a hyperlink to Monday’s Justice Department press release that contained an agreement to create a nearly $1.8 billion fund to compensate people or organizations that have been “weaponized” by past administrations — a fund widely expected to benefit Trump’s allies, including January 6, 2021, US Capitol rioters.

This additional settlement term is an extraordinary step that Trump’s own administration has taken that benefits him and his family directly.

Acting Attorney General Todd Blanche made no mention of the additional term during testimony before a Senate committee earlier Tuesday.

Trump’s lawsuit — and how the Trump administration resolved it — has been labeled “self-dealing” by the president’s critics, since Trump controls the executive branch agencies that were deciding how to respond to a lawsuit he brought in his personal capacity. Trump abruptly dropped the case after signals that the judge could probe whether it was a legitimate legal dispute belonging in court.

According to the new document, dated Tuesday and signed by acting Attorney General Todd Blanche, the federal government is “FOREVER BARRED and PRECLUDED” from prosecuting or pursuing “claims” or “examinations” arising from matters pending before the IRS, including “tax returns” filed by Trump before the agreement was reached. The language applies not just to Trump, but to his family, trusts, companies and other affiliates.

The Justice Department did not answer CNN’s inquiry about why the additional terms were published belatedly. A spokesperson noted to CNN that the agreement would not block an IRS audit of issues stemming from tax returns that were filed by Trump or his family after the settlement date.

“As is customary in settlements, both sides have executed waivers of a variety of claims that were or could have been brought,” the spokesperson, Natalie Baldassarre, said. “There would be little point in settling several significant claims if either party could simply turn around and seek to initiative [sic] more adverse claims that could have been pursued previously.”

It’s not clear how an audit of whether Trump or his businesses were complying with tax law would relate to his claims in the lawsuit that the IRS violated federal privacy law by not properly safeguarding his tax documents from disclosure by a government contractor. The Justice Department also did not address a criminal law — now being raised by critics of the deal — that prohibits presidents and other executive branch leaders from requesting the termination of IRS audits.

The IRS didn’t respond to CNN’s inquiries about the new language.

Rep. Richard Neal, the senior Democrat on the House Ways and Means Committee — the chamber’s principal tax-writing panel —quickly condemned the addition as “corruption.”

“Trump has turned the federal government into his personal protection racket by making sure his, his family, and his companies’ taxes are permanently off limits,” Neal said in a social media post. “The same people struggling with groceries and gas are now forced to bankroll this billionaire’s legal shakedown and the enrichment of his family empire.

Senior officials have continued to defend the anti-weaponization fund since its announcement Monday, but have so far evaded questions about the newly released terms.

Blanche, who personally signed the new addendum but not the agreement itself, said during congressional testimony Tuesday morning that the president, his family and their entities agreed not to apply for payments through the fund. He was not questioned about any additional terms of the agreement.

And Associate Attorney General Stanley Woodward, who signed the original agreement, said it is “way, way, way too early to rush to judgement” on how the fund will be operated. Woodward also pledged that he would “not be signing off on any settlements involving any former clients,” which include Trump’s valet and former co-defendant Walt Nauta and others charged in connection to the January 6, 2021, Capitol riot.

This story has been updated with additional details.

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