The US Department of Justice has announced that this week’s unprecedented settlement of President Donald Trump’s lawsuit over the leaking of his tax returns blocks the IRS from reviewing tax filings that Trump, his family and his businesses made in the past.
Some lawmakers and legal experts say the department has violated federal law with its addendum to the agreement that shuts down current possible tax audits and investigations. The justice department, however, says the addendum is simply a customary waiver used in legal settlements.
In January, Trump and his two eldest sons sued the IRS [Internal Revenue Service] for $10bn over leaks of their business and personal tax returns. It was the first time a president had sued the US government.
On Monday, the justice department announced the suit was settled and the government had agreed to create an almost $1.8bn (£1.3bn) fund to compensate people who believe it unfairly investigated them. It has already inspired one lawsuit, as well as resistance from within Trump’s own Republican party.
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Here’s what we know.
What does the addendum do?
On Tuesday, a day after announcing the settlement agreement with Trump, the justice department released the addendum ending any possible pending audits.
The one-page addendum states that the United States is “FOREVER BARRED AND PRECLUDED” from a long list of actions that the IRS normally carries out to determine if a person or company has paid proper taxes and to seek recourse when they have not.
That list includes filing claims, conducting examinations or similar reviews, and seeking injunctive relief related to taxes filed by Trump, his family members, and their trusts, companies or subsidiaries.
Key in the addendum is that the taxes must have been filed before 19 May, 2026. The justice department issued a statement clarifying that the addendum “is only with respect to existing audits, not future”.
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The IRS does not announce its investigations, and so we do not know what – if anything – it was reviewing related to the president, his family and their enterprises.
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Is it legal?
In its statement, the department describes the addendum as “customary”, and also a necessary part of settling lawsuits in a way that ends them for good.
“There would be little point in settling several significant claims if either party could simply turn around and seek to initiative more adverse claims that could have been pursued previously,” the department said.
As news of the addendum spread, though, lawmakers and legal experts raised alarms.
The top Democrat on the Senate Finance Committee, Ron Wyden, said in a statement it is “clearly a violation of the law that prohibits interference by executive branch officials in IRS audits”.
“Democrats are going to fight every element of this self-dealing settlement, but regardless of the outcome of those efforts, future administrations and IRS leadership should consider this illegal directive completely invalid,” said Wyden, who graduated from University of Oregon’s law school.
Under US law, the president, vice-president and most other high-ranking members of the executive branch cannot directly or indirectly ask the IRS to terminate an investigation.
The major exception is the attorney general, and the addendum is signed by Acting Attorney General Todd Blanche. It can be argued, then, that the administration has followed the law.
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Getty ImagesCritics, such as the leaders of advocacy group Public Citizen, take the view that Trump has indirectly sought to end the audits.
Public Citizen co-presidents Robert Weissman and Lisa Gilbert said in a statement that Trump filed a “bad-faith lawsuit” and, with the settlement, “aims to escape from IRS audits”.
IRS officials who receive illegal requests to terminate audits must report them or face possible criminal prosecution, and experts warn that the agency’s employees could now be at legal risk.
