The US Department of Justice prohibited the IRS from auditing the previous tax returns of Trump and his companies

The US Department of Justice, as part of a settlement in Donald Trump’s lawsuit against the US Internal Revenue Service (IRS), effectively prohibited the tax agency from conducting audits of his previous tax returns, as well as the returns of his family members, companies and related entities. As Reuters reports, citing a one-page document published by the Department of Justice, the US government is “permanently deprived” of the ability to conduct audits of Trump’s tax returns filed before May 18, 2026, as well as on issues that “were or could have been raised” earlier.

The decision was part of a $10 billion settlement of Trump’s lawsuit against the IRS. He alleged that the IRS failed to protect his confidential data after his tax returns were leaked to the media. Former IRS contractor Charles Littlejohn, who leaked Trump and other wealthy Americans’ tax records to reporters, has been sentenced to five years in prison. Under the terms of the agreement, Trump will drop the lawsuit and will receive an apology, but not monetary damages.

Instead of paying Trump, the Justice Department is creating a nearly $1.8 billion fund to compensate individuals who say they were harmed by politically motivated exploitation of government agencies. Reuters notes that the fund will be under the control of a commission, the majority of whose members will be appointed by acting Attorney General Todd Blanche, who previously represented Trump as a lawyer in criminal cases.

Democrats in Congress and a number of lawyers called the agreement unprecedented and said it could allow funds to be directed to the president’s allies.

Lawyers who acted as independent consultants in court warned that a possible demand to stop tax audits of Trump, his family and businesses could go beyond the Justice Department’s authority: the president’s tax liabilities were not the subject of the lawsuit, and federal law specifically prohibits the president from directly or indirectly requiring the IRS to begin or stop an audit of a specific taxpayer.