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Under the terms of the deal, the IRS is ‘forever barred and precluded’ from pursuing claims against Trump, his family or his businesses
Brendan Rascius & Alex WoodwardTuesday 02 June 2026 22:24 BST- Bookmark
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President Donald Trump’s administration may have pulled the plug on his $1.8 billion “anti-weaponization” fund — part of a broader settlement resolving his unprecedented $10 billion lawsuit against the Internal Revenue Service — but one controversial element remains intact.
Last week, a federal judge in Washington, D.C., temporarily blocked the Trump administration from “taking any further action pursuant to the creation or operation of the Anti-Weaponization Fund,” designed to pay out victims of alleged government wrongdoing.
On Monday, the Department of Justice said it would comply with the court order and halt the creation of the $1.8 billion taxpayer-funded cache, which critics have derided as a no-strings-attached “slush fund” for Trump’s allies.
However, a separate provision in the settlement is poised to proceed: one granting Trump and his family broad tax amnesty.
Acting Attorney General Todd Blanche told members of Congress on Tuesday that “nothing has changed” about the plan.
open image in galleryWhile President Donald Trump abandoned the $1.8 billion 'anti-weaponization' fund tied to his IRS settlement, a tax amnesty provision remains in place (Getty Images)“The only document” the administration is rescinding from the so-called settlement is compensation fund, Blanche told House lawmakers.
“There is still a settlement agreement,” he said, including the tax provision that Blanche called “an attorney general order.”
Blanche disputed the idea that the agreement amounts to “blanket immunity” for Trump, his family and their businesses.
A representative for the president’s legal team also told The Daily Beast that the agreement barring Trump from tax audits is moving forward.
The spokesperson criticized the IRS, claiming the agency “wrongly allowed a rogue, politically-motivated employee to leak private and confidential information about President Trump, his family, and the Trump Organization to the New York Times, ProPublica and other left-wing news outlets, which was then illegally released to millions of people.”
“President Trump continues to hold those who wrong America and Americans accountable,” the person added.
When reached for comment, a White House spokesperson referred The Independent to the president’s personal attorneys, who did not immediately respond.
Last week, the federal judge overseeing the president’s lawsuit against the IRS suggested the case could be re-opened if the court finds that the complaint was filed as a smokescreen for the so-called “settlement” that helps the president and his allies.
The judge will determine whether Trump filed a “frivolous lawsuit for the sole purpose of forcing a settlement” to create a fund for his political allies while the president, his family and their businesses escape government scrutiny for tax debts.
open image in galleryActing Attorney General Todd Blanche has defended the settlement deal while disputing that the president is receiving ‘blanket immunity’ from investigations into alleged tax crimes (Getty Images)Filed in January, the president’s suit alleged the IRS failed to prevent the leak of his tax returns to the media and sought damages tied to federal investigations into his 2016 campaign’s ties to Russia, as well as the FBI’s 2022 search of Mar-a-Lago.
Under the terms of the settlement announced last month, the federal government planned to establish a $1.8 billion “anti-weaponization” fund and agreed that the IRS will be “forever barred and precluded” from pursuing claims against Trump, his family or his businesses.
The settlement, which applies only to existing audits and not future ones, shields the president from a potentially damaging ruling that could have cost him more than $100 million, according to The New York Times, which was one of several outlets to obtain Trump’s leaked tax return data.
The announcement of the tax amnesty provision drew swift criticism from Democrats, who labeled it an example of blatant corruption.
“The President is now exempt from our tax laws while everyone else has to obey them. Got it,” Connecticut Sen. Chris Murphy wrote on X. “It’s just mind blowing that is what’s happening in America.”
Some Republicans also raised concerns over the settlement deal, particularly over its $1.8 billion “anti-weaponization” fund. Senate Majority Leader John Thune said he is “not a big fan.”
A spokesperson for the Trump Organization previously told The Independent that the deal is necessary to right past wrongs.
“This settlement seeks to provide meaningful accountability for the IRS’s prolonged and systemic failure to safeguard sensitive taxpayer data, which resulted in the unlawful disclosure of confidential tax return information relating to more than 500 Trump Organization-affiliated entities, as well as the personal tax returns of President Donald J. Trump, Eric Trump, and Donald Trump Jr.,” the spokesperson said.
The administration, however, is “not moving forward” with the compensation fund.
"We're not moving forward with the fund. Period,” Blanche told House lawmakers on Tuesday.
“Not moving forward ever?” asked Rep. Grace Meng.
”Correct,” he replied.
Under opaque plans for the compensation fund, the Department of Justice would turn to the long-standing Judgment Fund to settle any claims brought against the government.
A five-member board made up of Blanche’s appointees would then arrange payments from the fund to recipients, whose identities would then remain secret, raising questions about the process and who stands to benefit.
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