Republicans let Trump keep unparalleled benefit: IRS immunity
- The San Juan Daily Star
- 6 days ago
- 4 min read
By ANDREW DUEHREN
Even as he bowed to Republican demands to pare back the extraordinary benefits the Justice Department offered to President Donald Trump and his allies this spring, the acting attorney general, Todd Blanche, would only go so far.
Blanche did, after weeks of back and forth, put in writing that he was ending the $1.8 billion fund created to pay people who say they have been targeted by Democratic officials. And as part of the same announcement Sunday night, Blanche clarified that there were, actually, some limits on the seemingly boundless protection from IRS examination that he ordered up for Trump, his family and their businesses.
But the fact remains that Trump, a billionaire who has tangled with the IRS throughout his life, no longer has to worry about the agency coming after him for any of the many aggressive tax positions he has taken over the years. Where the IRS previously made a point of regularly auditing whoever occupies the Oval Office, Trump has leveraged his control of the federal government to instead escape the scrutiny that every other modern president, not to mention every other regular taxpayer, has been subject to.
There’s no question that such immunity, itself without precedent, will be immensely valuable for Trump. But exactly how much in additional taxes and penalties he can now avoid is unclear. IRS audits are, in general, confidential. Just one dispute Trump had with the agency, previously revealed by The New York Times, could have cost him more than $100 million. Any other ongoing audits could have cost him even more.
“I’ve been audited every year for my entire life, which — I have a lot of wealthy friends that were never audited to this day, they were never audited. I was audited,” Trump said in the Oval Office on Monday. “I was treated very unfairly by the IRS.”
Trump’s newly won ability to thwart the tax agency does not seem to bother the Senate Republicans who refused to advance Blanche’s nomination to be attorney general without changes to the deal. Both of them, Sens. John Cornyn of Texas and Thom Tillis of North Carolina, said Monday that they were satisfied with Blanche’s concessions and would vote to approve him.
Indeed, Cornyn and Tillis had only ever sought to correct the sloppy way the audit protection was drafted — and to put into writing his previous, spoken clarifications. Cornyn, for example, asked Blanche to state that Trump could only avoid audits of tax returns he had already filed, meaning that the president could still face an IRS exam of claims he makes the next time he does his taxes.
The initial wording of Blanche’s May 19 order also seemed to extend the protection not only to Trump, but to his entire family “without limitation” and any companies they were connected to. That raised the possibility of a huge pool of people and companies claiming immunity under the deal.
Sen. Elizabeth Warren, D-Mass., last month sought to test the boundaries of Blanche’s proclamation, asking 11 companies with connections to Trump family members, including Kalshi, Polymarket and American Bitcoin, if they considered themselves protected from IRS audits. Six of the companies, including those three, responded that they did not. Others, like World Liberty Financial, did not reply to Warren.
Blanche, at Cornyn’s urging, wrote Sunday night that only the plaintiffs in the lawsuit that Trump filed against the IRS would be eligible for the audit protection. That includes the president, Donald Trump Jr., Eric Trump and the Trump Organization — which Trump’s lawsuit defines as the Trump Organization LLC and 418 other entities that are not specifically identified.
Trump’s lawsuit against the IRS, filed in January, focused not on a dispute over an audit but the leak of his tax information during his first term. Federal law allows people to sue the agency if their tax returns are improperly disclosed, and it offers the possibility of monetary damages if a court finds the IRS to blame for the leak.
Trump originally demanded at least $10 billion in damages from the IRS, but the Justice Department instead gave him the audit protection as part of a deal to end the lawsuit. The Justice Department settled without contesting Trump’s claims, though lawyers at the IRS had recommended several defenses against them.
The federal judge in Miami who oversaw Trump’s lawsuit against the IRS has blasted the outcome as a collusive exercise in self-dealing. She has noted that she lacks the legal power to halt it, one of the many legal uncertainties surrounding the audit provision.
Also among them is whether Blanche, as the acting head of the Justice Department, even has the authority to direct how the IRS, a part of the Treasury Department, conducts its audits.
There is also a statute prohibiting the president and his aides from directing the IRS to start or stop an audit. While that law does include a carve out for the attorney general, it still creates the risk that individual IRS agents could face criminal investigations under a future administration for following through on Blanche’s order.
Such weighty legal questions would usually fall to the top lawyers at the Treasury Department and the IRS. But the general counsel of the Treasury Department quit the day the Justice Department announced that it was settling Trump’s lawsuit against the IRS.
And the acting top lawyer at the IRS, Ken Kies, was pushed out of the administration last month, though he had been recused from issues involving Trump because he had worked for Trump as a tax lawyer. Trump’s choice to succeed Kies as the chief counsel of the IRS is another tax lawyer who has worked for him.
The IRS has not answered questions about whether it is following Blanche’s direction.
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