Trump's DOJ forever-bars IRS claims against Trump and family

On May 18, 2026, the Justice Department announced a settlement of Trump v. Internal Revenue Service (No. 1:26-cv-20609, S.D. Fla.), the $10 billion lawsuit Trump filed in January 2026 with two of his sons and the Trump family business. The suit alleged that the IRS failed to prevent a former contractor from leaking his first-term tax returns to The New York Times and ProPublica. Trump agreed to drop the suit in exchange for the creation of a $1.8 billion "Anti-Weaponization Fund," described by DOJ as compensation for people Trump believes were wronged by federal investigations or prosecutions. DOJ defends the Fund by noting that Trump and his family will not be paid by it. The Fund's eligibility criteria, application process, decision-making body, and disbursement mechanism are not specified in the publicly available DOJ order or in press reporting and remain undefined as of May 19, 2026.

One day later, Acting Attorney General Todd Blanche signed and quietly posted to the DOJ website a one-page implementing order that goes substantially further than the audit-drop initially reported. The order declares that the United States "RELEASES, WAIVES, ACQUITS, and FOREVER DISCHARGES" the Trump plaintiffs and is "FOREVER BARRED and PRECLUDED from prosecuting or pursuing" any and all claims (including injunctive relief, monetary relief, damages, examinations, debt relief, costs, attorney's fees, and interest) that have been or could have been asserted against the plaintiffs or against "related or affiliated individuals (including, without limitation, family or others filing jointly), or parties including trusts, parent, sister, or related companies, affiliates, and subsidiaries." The bar covers any matters raised or raisable in the Case or in "Pending Agency Claims"; any conduct framed as "Lawfare and/or Weaponization"; and any matters currently or potentially pending (including tax returns filed before the Effective Date) before the named defendants or "other agencies or departments."

The breadth matters in dollar terms. IRS procedures mandate annual audit of a sitting president's tax returns, and the NYT reported in 2024 that a loss in one existing Trump audit alone could cost him more than $100 million. Whether that audit has concluded, and whether other Trump-related examinations are pending, is not publicly known. Federal law generally prohibits executive officers from directing the IRS to start or stop specific audits but appears to carve out the attorney general, the role through which Blanche, who served as Trump's personal criminal-defense lawyer before becoming Acting AG, instrumented this settlement. Treasury's top lawyer Brian Morrissey resigned the same day the settlement was announced; the reason he gave has not been reported.

Subsequent reporting established that the resolution was negotiated almost entirely by lawyers loyal to Trump, with no judicial oversight. On the government side, the talks were run by Blanche and his senior deputy, Trent McCotter, who proposed the compensation fund and set its symbolic figure at $1.776 billion. On Trump's side were his private lawyers, among them Boris Epshteyn — a former client of Blanche's who had helped recruit him into government — who coordinated discussions among Trump, his personal counsel, and DOJ and circulated drafts of the tax-immunity agreement. The Justice Department's Office of Legal Counsel, run by T. Elliot Gaiser, blessed the fund by analogizing it to the Obama-era Keepseagle v. Vilsack class-action settlement; former lawyers from that case noted that Keepseagle was overseen by a federal judge after years of litigation, whereas this fund was not. The settlement also absorbed roughly $230 million in separate claims filed by Daniel Epstein of America First Legal — the group co-founded by Stephen Miller — seeking compensation for the Russia investigation and the 2022 FBI search of Mar-a-Lago. The document declaring the suit resolved was signed by DOJ's No. 3 official, Stanley Woodward Jr.; the broader tax-immunity addendum was signed only by Blanche, with no IRS signatory.

The arrangement drew immediate bipartisan criticism, and within days senior officials began preparing to scrap the Fund. On May 29, the judge overseeing the suit, Kathleen M. Williams, reopened the case to ask whether the parties had deceived her, and a separate federal judge in Virginia temporarily froze the Fund. Some Republican senators, angered by the deal, abandoned a measure to finance the administration's immigration crackdown. Officials at the Trump Organization briefly weighed whether to file claims against the Fund themselves before a decision was deferred.