The administration of Donald Trump has come under sharp criticism after the US department of justice (DoJ) issued a directive permanently barring tax authorities from pursuing audits or tax claims against the president, his family and his businesses.
The move emerged
through a one-page addendum quietly posted on the justice department’s website on Tuesday, a day after president Trump agreed to settle a US$10bn (billion) lawsuit against the internal revenue service (IRS) over the leak of his tax returns to media organisations between 2018 and 2020.
The document, signed by acting attorney general Todd Blanche, stated that the government would be 'FOREVER BARRED and PRECLUDED' from 'prosecuting or pursuing' tax claims against Mr Trump, members of his family, the Trump Organisation and related companies.
The addendum further stipulated that the waiver would apply to inquiries 'currently pending or that could be pending', including matters connected to tax returns filed before Monday’s settlement agreement.
The justice department later clarified that the protection applied to existing tax examinations and not future filings. However, critics say the agreement amounted to an unprecedented use of executive authority that effectively insulated the president and his associates from scrutiny over previously filed returns.
The settlement followed president Trump’s decision to drop his lawsuit against the IRS and the treasury department. The lawsuit alleged that leaks of confidential tax information caused reputational and financial harm to Mr Trump, his sons Eric Trump and Donald Trump Jr, and the Trump Organisation.
Under the original settlement agreement announced on Monday, president Trump agreed not to seek financial damages from the government in exchange for a formal apology and the creation of a US$1.776bn 'anti-weaponisation fund'.
The fund is intended to compensate individuals who claim they were targeted through politically motivated investigations or prosecutions, including during the administration of former president Joe Biden.
The arrangement immediately triggered outrage among Democratic law-makers and ethics experts, who described the fund as opaque and vulnerable to political misuse.
Senator Adam Schiff accused the Trump administration of 'corruption' and 'self-dealing'.
Mr Blanche rejected allegations that president Trump personally directed the creation of the fund or that it would operate in a partisan manner.
“Whether you are Hunter Biden, or whether you are another individual who believes they were the victim of weaponisation, they can all apply to this fund,” Mr Blanche told lawmakers, referring to Mr Biden’s son.
The fund will reportedly be overseen by a five-member commission, four of whom will be directly appointed by Mr Blanche. Critics have raised concerns that the body will not be required to publicly disclose all payouts or the basis for compensation decisions.
According to the settlement text, the commission will submit confidential quarterly reports to the attorney general detailing payouts and recipients.
Tax and legal experts described the immunity provision as highly unusual.
The controversy also revived debate over transparency in presidential tax disclosures. Although US presidents are legally required to file tax returns and remain subject to IRS audits, president Trump broke with decades of political tradition by refusing to voluntarily release his tax returns during the 2016 presidential campaign.
Judge Kathleen Williams, who handled the lawsuit, dismissed the case on Monday but criticised the government for failing to provide adequate transparency regarding the settlement documents.
In her filing, she noted that no government agency had submitted documents ensuring the settlement was appropriate despite 'an outstanding question as to whether an actual case or controversy existed'.
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