Trump's old taxes can't be audited as part of IRS deal. That's unprecedented — and hard to reverse

An already controversial settlement of President Donald Trump’s lawsuit over leaked tax files would permanently halt existing tax audits of Trump and several associates.

The Justice Department announced the move May 19, a day after releasing details of a $1.776 billion fund to pay for claims of federal government "weaponization." Critics have called it a "slush fund" for Trump supporters, such as those convicted of, and later pardoned for, crimes during the Jan. 6, 2021, storming of the U.S. Capitol. 

The fund was designed to resolve a $10 billion lawsuit by Trump and his sons Donald Jr. and Eric Trump against the IRS, citing a leak of Trump-related tax materials.

The document on tax audits, signed by Acting Attorney General Todd Blanche, says the IRS will be "forever barred and precluded" from auditing the returns of Trump and related individuals, trusts and businesses, as long as the returns were filed before May 18, 2026.

The document precludes "prosecuting or pursuing any and all claims, counterclaims, causes of action, appeals, or requests for any relief, including … monetary relief, damages, examinations or similar or related reviews, appeals, debt relief, costs, attorney’s fees, expenses and/or interest, whether presently known or unknown."

The New York Times estimated that stopping long-running audits of Trump’s finances could save him $100 million. The Times has reported that the audit was prompted by a $72.9 million tax refund Trump received starting around 2010.

Such a sweeping close to existing audits is unprecedented, and it would not be easily challenged in court, by Congress or by future administrations, legal and tax experts said.

Danny Werfel, who served as IRS commissioner from 2023 to 2025, told Politico he was "unaware of a single precedent where the IRS has agreed in advance to permanently forgo examination of previously filed tax returns for a specific person or business."

One big obstacle to ending the legal protections for Trump and his associates would be finding someone who has legal standing to challenge it. "Standing" refers to having the right to sue based on a harm caused by someone else’s action. Experts say locating someone harmed by relieving Trump and others of potential tax penalties is unlikely. Simply being a taxpayer is not considered sufficient.

Congress could move to block or amend certain provisions of the policy, but the critics have not shown that they have the two-thirds required in both chambers to override an expected Trump veto.

The most likely option for challenging the policy would be for a future administration to reverse it.. "The IRS could seek to void agreements with a showing of fraud, malfeasance, or misrepresentation of a material fact," said Tax Law Center policy director Brandon DeBot. 

But such an effort would face obstacles, including the Trumps’ ability to fight back in court.

New York University law professor Daniel Shaviro  said his advice if the next administration wanted to reverse the policy is to "ignore it and go ahead with whatever proceedings against the plaintiffs they consider appropriate. The Trumps would of course raise this as a defense — and they would have the standing to do so — but that doesn’t mean it would be upheld."’

Trump and his associates may also benefit from expiring statutes of limitations.

A future IRS chief would face substantial practical obstacles, former IRS Commissioner John Koskinen told PBS NewsHour.

"By the time a new IRS commissioner shows up, the (money from the contested tax returns) will be gone, and tracking it down will be difficult," he said. 

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