Politics

Trump’s IRS Deal Could Erase Millions in Back Taxes and His Incoming Attorney General Just Kept It in Place

By Mike Harper · August 4, 2026

The fund for Trump’s allies is gone. The deal that could erase the president’s tax bill is still in place.

Acting Attorney General Todd Blanche formally rescinded a proposed $1.8 billion compensation fund that would have paid Trump’s political allies — including January 6 defendants — from taxpayer money. The move satisfied two Republican senators who had threatened to block his confirmation. But the audit immunity agreement that could wipe away millions in Trump’s back taxes was left untouched.

In a document sent to lawmakers Sunday, Blanche said the audit immunity would apply only retroactively — to tax returns filed before May 19, 2026 — and would not protect Trump from examination of future filings. For the holdout Republicans, Senators John Cornyn and Thom Tillis, that was enough to clear the path to confirmation.

For everyone else, the question is what “retroactively” covers.

The immunity was struck as part of a settlement resolving Trump’s $10 billion lawsuit against the IRS over his leaked tax returns. According to Forbes, the agreement blocks the IRS from reviewing any past tax returns filed by Trump, his sons Eric and Don Jr., and the Trump Organization before that May date. Published reports put the back taxes at issue at roughly $70 million, though Forbes noted the actual figure could be hundreds of millions or more depending on the scope of open audit claims.

“The good news is that Todd Blanche confirmed in writing that the anti-weaponization slush fund is dead. The bad news is that tax immunity for the president, his sons, and his family business is still alive.” Dan Greenberg, a senior legal fellow at the Taxpayers’ Protection Alliance, said.

No other taxpayer has received this kind of blanket retroactive immunity from IRS examination. Tax attorneys interviewed by the AP said the arrangement has no precedent in modern tax law. A typical IRS settlement resolves specific disputes over specific returns. This one exempts an entire family and business empire from scrutiny on every return ever filed.

A federal statute prohibits the president or the president’s employees from starting or stopping a tax audit. But the law allows the attorney general to do so — which means Blanche, once confirmed, would have both the legal authority and the stated policy position to halt any IRS review of Trump’s tax history.

The $1.8 billion fund drew the headlines. The audit immunity is what costs money. The fund was rescinded because it was politically untenable. The immunity survived because it was politically necessary — and because two senators decided that limiting it to the past was an acceptable trade for a confirmation vote.

Trump’s future tax returns will be subject to normal IRS review. His past returns — and whatever they contain — will not.