Attorney General nominee Todd Blanche says he has agreed to scale back the IRS audit immunity he made on President Trump’s behalf. But the revisions, made to satisfy the demands of two key Republican senators, appears to continue without change the president’s unprecedented personal immunity from audits of all his past tax returns.
The result: This latest agreement would continue to assure that Trump and his sons would benefit from special tax treatment no other taxpayer has received.
Billions Of Dollars Potentially At Stake
It would exempt from audit all Trump’s tax returns filed before May 19, 2026, a step that could potentially save the president hundreds of millions or even billions of dollars in taxes. It would block the IRS from reviewing any of Trump’s past tax returns, as well as those of his sons Eric and Don Jr. and his businesses.
Many published reports say about $70 million in back taxes is at issue. But that involves only a single year of Trump taxes. There is far more at stake than that.
That audit protection could include, for example, any return filed prior to May 19 that reflects the more than $2 billion Trump reported earning while president from his cryptocurrency businesses and his thousands of stock trades. The White House has not said when Trump filed his return for tax year 2025, or indeed if he has filed it at all.
The Senators’ Objection
Blanche, who was Trump’s personal lawyer before joining the Justice Department in 2025, is the president’s choice to be attorney general. However, his nomination has been held up by Republican senators John Cornyn (R-TX) and Thom Tillis (R-NC).
Both lawmakers, who are lame ducks, demanded the Administration scale back the unusual agreement Trump made in May. In that settlement, Trump dropped a $10 billion lawsuit against the IRS. In return, the government granted him and unspecified associates tax immunity.
Separately, it created a nearly $1.8 billion taxpayer-funded account that Trump could use to compensate people he believed were unfairly prosecuted by prior administrations. Trump calls it an anti-weaponization fund. Critics call it a political slush fund.
Cornyn and Tillis demanded the fund be abandoned, which Blanche says he has done, though Trump insists he still will find a way to compensate political allies. But the lawmakers did not insist the IRS immunity provisions be dropped. Rather, they wanted only to limit any audit exemption to returns filed before May 19 and limit the entities that benefit from the protection to Trump, his two sons, and his businesses.
Cornyn and Tillis say they are satisfied with the latest agreement.
What Blanche Didn’t Do
In his X post, Blanche appears to have promised to drop the references to other unspecified entities that could benefit from the tax portion of the settlement. Yet, as far as the president’s own taxes are concerned, the latest agreement provides exactly the same protections as the original.
Tax lawyers say its broad exemption from audit is unprecedented. Typically, when the IRS settles a case with a taxpayer, it may agree to foreclose future audits, but only for the disputed return.
Tax lawyers tell me they know of no case when the IRS granted blanket immunity from audit for all of a taxpayer’s prior returns. “I have never seen anything like it,” says my former Tax Policy Center colleague Steve Rosenthal, who spent many years in private law practice.
Trump’s suit was extraordinary because, as president, he was effectively suing his own government. And his own political appointee, Blanche, negotiated and agreed to the audit immunity deal.
Indeed, after the settlement was reached and the suit dismissed, the federal judge in the case, Kathleen Williams, wrote Trump’s lawsuit “was brought for an improper purpose—to gain the imprimatur of judicial legitimacy for a “settlement” that had no viable basis in law or fact.” As a result, she sanctioned Trump’s attorneys for their role. The president is appealing those sanctions.
The settlement was even more unusual since the IRS was likely to win Trump’s lawsuit. The president sued after a contractor leaked a copy of his tax return to news organizations. But in prior cases, courts have consistently ruled the IRS is not liable for the actions of its contractors.
There’s more. It is a federal crime for Administration officials to interfere with IRS audits. In addition, Trump may have missed a deadline for filing the suit.
Finally, legal settlements normally are revised only when formal documents are signed by all the parties to the litigation. In this case, that would be Trump, his sons, his personal lawyers, the IRS, and the Justice Department. Yet, there is no signed document revising the legal settlement, only an unsigned social media post by Blanche.
One unanswered question is whether Blanche’s agreement will bind a future IRS from auditing prior year Trump tax returns. Lawyers tell me it probably would not, but add there is no way to predict how the Supreme Court would rule.
This fig leaf of a compromise may be sufficient for Blanche to win Senate confirmation as Attorney General. But it will continue to preserve tax audit immunity for Donald Trump and his sons that no other American enjoys.
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