Senate Republican anger about President Donald Trump’s $1.8 billion fund for people who claim to be victims of federal overreach was loud and apparent.

It held up the Republican agenda in Congress for weeks, and during a marathon voting session Thursday and early Friday, several Republicans voted to end the fund, though those efforts failed. Still, the furor forced the acting attorney general, Todd Blanche, to announce this week that he was abandoning it entirely.

Not so for the protections from IRS audits that Blanche also ordered up for Trump and his family. On that front, Republican reaction has been much more muted, and Blanche said the audit shield would stay in place. A Democratic effort to cancel the audit protection failed on a voice vote.

The result is that an apparently unprecedented and enormously valuable public benefit for the president has, so far, flown under the radar in Congress and passed into Trump’s hands without much protest from members of his own party.

Trump Gains Relief From IRS Audits

Trump and his family have spent decades aggressively avoiding taxes, according to previous reporting in The New York Times. The newly won ability to escape from IRS examinations could be worth tens of millions of dollars: One audit, ongoing in the days before the new immunity for Trump was announced, could have resulted in a bill from the government exceeding $100 million, the Times has reported. Other authorities have had questions, too: In 2022, the Trump Organization was convicted of tax fraud in New York.

Trump has also sought to avoid public scrutiny of his taxes. During his first run for office in 2016, he refused to release his tax returns, breaking a norm for presidential candidates. Trump said at the time he had to keep his returns private because he was subject to an IRS audit — a perennial problem.

“Every year, they audit me, audit me, audit me,” he said at a Republican primary debate in February 2016. “Nobody gets audited. I have friends that are very wealthy people. They never get audited. I get audited every year.”

Trump’s decision to not release his tax returns in 2016 would eventually snowball into the audit immunity unveiled last month by Blanche, Trump’s former personal lawyer.

Tax Return Leak Fueled Public Interest

Public interest in Trump’s tax situation was enormous at the time, as initial reporting showed that he had claimed vast business losses that could have helped him avoid paying any federal income taxes. In 2017, a man named Charles Littlejohn applied for a job at the consulting firm Booz Allen Hamilton. His intention was to work as a contractor for the IRS and leak Trump’s tax returns, according to testimony he later gave in a deposition.

Littlejohn succeeded, providing years of Trump’s tax returns to the Times in 2019, as well as the returns of thousands of other wealthy Americans to ProPublica in 2020.

The resulting series of articles in the Times in 2020 revealed that Trump had paid little or no federal income taxes for years. The reporting showed Trump trying to reduce his taxable income in large and small ways, including by treating his daughter Ivanka as a consultant and then deducting the fee as a cost of doing business.

Unauthorized disclosure of tax information is a federal crime, and Littlejohn was prosecuted for leaking the returns and sentenced to five years in prison during the Biden administration. But the leak seemed to inflame Trump’s enmity for the IRS. In January, he sued the agency for at least $10 billion, accusing it of not doing enough to stop Littlejohn’s leak.

Trump was suing an agency that he ultimately controls, an extraordinary attempt by the president to extract financial gain from the government. Rather than contest Trump’s suit in court, as lawyers at the IRS suggested, top Justice Department officials this spring instead sought to settle it before a judge could rule on its legitimacy.

Judge Examines Unusual Settlement Deal

Blanche did not want to directly pay Trump money out of the Treasury, the Times has reported. Instead, the Justice Department created the $1.8 billion fund, now seemingly dead, and offered Trump, his family members and their businesses sweeping protections from audits of tax returns they have already filed. In return, Trump dropped his suit, an arrangement that the judge who was originally assigned to the case is now investigating.

The judge in that inquiry, Kathleen M. Williams of the Southern District of Florida, is looking into whether Trump’s lawyers deceived her when they brought the original suit, though it is unclear if she would have the power to unwind the audit protection during those proceedings. Because the deal is between the government and Trump, it may also be difficult for a third party to challenge it in court.

Blanche, in testimony before the House this week, cast the audit protection as a typical part of how the IRS settles litigation. But Trump’s suit focused on the unauthorized release of his tax returns, not a dispute over a tax position. Tax experts said amnesty in an actual tax controversy would typically come from the IRS, not the acting attorney general, and would apply only to specific issues on the tax returns under review.

But Blanche’s order ends “any matters currently pending or that could be pending” for a wide range of people, including Trump’s family members and their businesses or “affiliates” who were not involved in the original lawsuit. Those protections apply to all tax returns already filed and could extend to the far reaches of the Trump business empire, which has expanded in recent years as Trump and his sons have plunged into new ventures, like cryptocurrency.

Status of IRS Audits Remains Unclear

The audit that was potentially worth more than $100 million stemmed from how Trump claimed losses on his Chicago tower. But there are several other known audits of Trump that the IRS started in recent years. It is unclear whether any of those are still pending, just as it is uncertain whether the IRS has enacted Blanche’s order. The IRS and the Treasury have not responded to questions about whether they are doing so.

“He’s been audited many, many times, and many of those audits have continued for years and years and years,” said Joseph J. Thorndike, a tax historian. “I have no reason to believe that any other president has had anything like this kind of relationship with the IRS, as a private citizen or president.”

In 2022, the House Ways and Means Committee, then led by Democrats, released several years of Trump’s tax returns, an effort that had to overcome a legal challenge by Trump that ultimately went to the Supreme Court. The committee also published information about how the IRS had audited him.

The IRS opened 10 audits of Trump and his holding company between 2019 and 2022, questioning a variety of his tax positions, according to the investigation. Among the major issues were the legitimacy of enormous business losses he routinely recorded on his tax returns, as well as whether a tax break claimed on his Seven Springs estate in New York was valid. IRS officials visited the Seven Springs property in January 2022, after Trump had left office.

IRS Audits Extended Beyond Presidential Review

Under IRS procedures, the president’s annual tax return is supposed to be audited every year. The Ways and Means investigation showed that the agency audited him in part because of what it saw on his tax returns, rather than simply because he was president.

With more than 400 business entities under Trump’s control, the IRS struggled to get its arms around the various ways Trump appeared to be avoiding taxes, the investigation showed. And Trump was known at the IRS to be a difficult target. His team of tax lawyers, which included a former top IRS official, repeatedly complained to the agency about how it was conducting the audits, including by increasing the size of the examination team from one agent to three.

An internal IRS memo, quoted by the House Democratic report in 2022, said that “animosity” between Trump’s tax counsel and the IRS was making the process more difficult. One tax lawyer who worked for Trump, Ken Kies, is now a Treasury official who is acting as the top lawyer at the IRS. It is unclear whether Kies was involved in the audits referred to in the House investigation, and he has recused himself from tax questions involving Trump.

It is also unclear whether the IRS had initiated any new audits of Trump since 2022, including during his second term, when he would have again been subject to the IRS practice of auditing the president’s annual tax return.

Trump’s future tax returns are still fair game for the IRS to review under Blanche’s order. But Trump could continue to benefit from a clean bill of health on his previous returns if it allows him to take advantage of tax positions that the IRS can no longer challenge, including by potentially using past losses to offset future taxable income.

That could help Trump avoid paying much in federal income taxes for years to come, an approach he has refined for much of his life and that, a decade ago, he said “makes me smart.”

—

This article originally appeared in The New York Times.

By: Andrew Duehren/Doug Mills

c.2026 The New York Times Company