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The Internal Revenue Service of the United States (US) will no longer pursue back-tax claims against US President Donald Trump, his family or his businesses under a settlement agreement announced by the Justice Department on Tuesday.
Trump, alongside his sons, Eric Trump and Donald Trump Jr., as well as The Trump Organisation, filed a $10 billion lawsuit against the IRS in January over the leak of his tax returns.
A former IRS contractor pleaded guilty in 2023 to leaking the tax records of Trump and other wealthy Americans to the media and later received a five-year prison sentence.
Under the new arrangement, Trump withdrew the lawsuit on Monday in exchange for the establishment of a $1.7 billion “Anti-Weaponisation Fund” designed to compensate individuals who claim they were unfairly targeted during the administration of former President Joe Biden.
Democrats criticised the initiative, describing it as a “slush fund” intended to reward political loyalists with taxpayer money.
An addendum to the settlement, signed by Acting Attorney General Todd Blanche, stated that the IRS is “forever barred” from pursuing any pending tax claims against Trump, his family or associated businesses as of the May 18 settlement date.
Trump has repeatedly refused to publicly release his tax returns during and after his presidency, arguing that they were under IRS audit.
Appearing before a Senate committee on Tuesday, Blanche defended the compensation programme against allegations that it would benefit only Republicans or Trump allies.
“Anybody in this country is eligible to apply if they believe they were a victim of weaponization,” Blanche said.
