On May 18, the Justice Department, the IRS and President Donald Trump signed the settlement agreement heard round the world: a resolution of Trump’s lawsuit against the IRS for the leak of his tax-related information years ago, as well as his administrative claims regarding the Mar-a-Lago search and the “Russia collusion hoax,” in exchange for the creation of a $1.776 billion “Anti-Weaponization Fund.” 

That fund would redress the alleged political weaponization Trump said elected Democrats wielded against “individuals, groups, and entities for improper and unlawful political, personal, and/or ideological reasons.” 

Now, after political blowback, coupled with a temporary court order preventing that fund from receiving or distributing money, reporting indicates that the White House is dropping the idea of the fund altogether.

Yet while most of the attention has focused on what many were calling a “slush fund,” a short addendum to the settlement, added the day after the splashy press announcement, was a bit overshadowed, perhaps by design.

The Justice Department released a one-page document, signed only by acting attorney General Todd Blanche, that releases Trump, his family and his companies from — and bars the federal government from pursuing — any and all claims, lawsuits or relief of any kind that were asserted, or could have been asserted, by the Treasury Department or the IRS against them as of May 18, 2026. 

Put simply, the acting attorney general has, with a single piece of paper, sought to erase any tax-related liability, civil or criminal, that any Trump or related business had as of last month.

And the breadth of that release — as well as who granted it and how — has many tax law experts sounding the alarm.

Brandon DeBot and Dave Hubbert of NYU’s Tax Law Center have observed that Blanche had no power to release the Trumps and their companies from tax-related liability. While the attorney general has broad settlement authority in cases, they note that Justice Department policy prohibits them from settling matters that have not been referred to the department for prosecution or defense. 

David Ogden, a senior counsel with Democracy Defenders Fund and himself a former deputy attorney general, explained to MS NOW that as a result, the DOJ “doesn’t necessarily have the power to bind the IRS on every potential claim.” While Trump was litigating against the IRS for an alleged violation of his privacy rights, there are no other publicly known, tax-related matters that have been referred to the department.

Ogden added that Blanche’s addendum “would provide benefits to third parties” who were not themselves plaintiffs to Trump’s lawsuit against the IRS, which he said constitutes a violation of the Justice Department’s own policies.

“This kind of sweeping immunity is unprecedented and yet another abuse of power,” Ogden said.

Nor is the addendum countersigned by anyone other than Blanche, as one would expect of an amendment to a settlement agreement. Rather, it reads like a Justice Department decree.

DeBot and Hubbert further point out that the federal government does have a mechanism for resolving tax-related disputes that have not been referred to the DOJ. Under federal law and related regulations, the IRS may enter into “closing agreements” with individual taxpayers, which can close audits formally — and finally. 

Nina Olson, the executive director of the Center for Taxpayer Rights, told MS NOW that closing agreements could have been a nonstarter for Trump or his representatives. The statute authorizing closing agreements also specifically provides that they are final unless there was fraud or the facts of the case were misrepresented.

Olson says either the IRS or the DOJ might have been concerned that any closing agreement with Trump could be reopened, something one would expect the administration to try to prevent. After all, Trump moved to dismiss his lawsuit against the IRS with prejudice, a move that typically ends all judicial oversight, before the Justice Department announced he had reached a settlement with it and the IRS. 

Critics of the settlement have charged that this was by design: Trump, in their telling, deliberately aimed to strip the court of jurisdiction over his case — and supervision of the settlement.

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The statute authorizing closing agreements does not state that they are the only way to settle disputes between the IRS and a taxpayer. That could have given administration officials comfort in moving forward with Blanche’s memo to eliminate any existing tax-related liability for the Trumps and their companies.

More importantly, it’s not even clear who could challenge that memo in court.

Federal law prohibits “any applicable person” — a term defined to include the president, vice president, any employee of their respective offices and virtually all Cabinet members — from requesting, either directly or indirectly, that the IRS either start or stop a tax audit of an individual taxpayer. The attorney general is exempt from this provision so that the Justice Department can pursue investigations or prosecutions without the IRS interfering or tipping off targets.  

But an ordinary citizen has no right to enforce that prohibition. Instead, enforcement falls directly to the Justice Department. Any person other than those allowed who tries to push for an audit — or to push to end one — is subject to a fine of $5,000 and up to five years prison. 

And even if an ordinary citizen wanted to bring a civil suit for other reasons, even constitutional violations, it’s unclear who would be allowed to pursue it. Bringing a federal lawsuit requires proof that the plaintiff has “standing,” or, as the Supreme Court has explained, a demonstration that the plaintiff has suffered or likely will suffer a genuine injury. 

But under decades of Supreme Court precedent, simply being a taxpaying American who expects the government to operate lawfully does not suffice.

Almost 20 years ago, a group of plaintiffs filed a lawsuit arguing that speeches by President George W. Bush and his education secretary violated their religious freedom rights and that they had standing as taxpayers. 

The Supreme Court disagreed: “As a general matter, the interest of a federal taxpayer in seeing that Treasury funds are spent in accordance with the Constitution does not give rise to the kind of redressable ‘personal injury’ required for Article III standing.”

Ultimately, the addendum is riddled with potential legal pitfalls that an ordinary taxpayer may not be able to cure through new litigation.

Still, whether or not any individual person or organization could directly challenge the release, 35 former federal judges have petitioned Judge Kathleen Williams, who oversaw the now-dismissed IRS lawsuit, to reopen the case. Their motion not only highlights the Anti-Weaponization Fund but also the “extremely broad” addendum that, in their reading, “sweeps in [IRS] audits of Plaintiffs’ tax returns and all other claims the United States might have against Plaintiffs.”

Williams has signaled that she is considering both that motion and whether she has the power, under a court rule governing attorney conduct, to sanction any of the Trump parties or their lawyers.

But could Williams actually invalidate the addendum? That too is unclear, if not unlikely. For now, barring legislation or an unforeseen lawsuit, her court seems like the best, and potentially only, option to reverse Trump’s “get out of taxes free” card.

Lisa Rubin

Lisa Rubin is MS NOW’s senior legal reporter and a former litigator.