The U.S. Department of Justice has barred the Internal Revenue Service (IRS) from auditing Donald Trump’s and his family’s tax returns from previous years as part of a settlement resolving the president’s lawsuit against the tax agency.
The lawsuit stemmed from the leak of Trump’s tax returns, which were published by American media outlets during his first presidential term. In court, Trump sought $10 billion in damages from the IRS.
Initially, the Justice Department announced only the creation of a $1.8 billion compensation fund intended to pay Trump supporters who claim they were unlawfully targeted by the previous administration. Trump himself, according to the original statement, was to receive only a formal apology without financial compensation.
CNN described the decision as unprecedented, since it involves payments from a federal agency controlled by the Trump administration using taxpayer funds.
The Justice Department later published a separate settlement agreement resolving Trump’s claims against the IRS. The document was signed by Acting Attorney General Todd Blanche.
The agreement states that U.S. authorities are abandoning tax-related claims against Trump and are “permanently barred from bringing any lawsuits” over those matters.
The Justice Department clarified that the restriction applies only to tax returns from previous years and does not cover future filings by Trump or his family. The department did not respond to CNN’s request for comment on why the document was released separately from the initial announcement about the compensation fund.
Democratic Congressman Richard Neal, who heads the tax subcommittee, described the decision as “corruption.”
Trump did not release his tax returns during either his first presidential campaign or his time in the White House, citing an ongoing audit. He became the first U.S. president since the early 1970s to refuse to disclose details of his tax payments.
The lawsuit against the IRS was filed in January 2026. It followed the publication of Trump’s tax returns for 2018–2020. The documents were leaked to the media by former IRS employee Charles Littlejohn.
In 2024, he was sentenced to five years in prison for the unlawful disclosure of tax records and related documents.