US drops Trump tax claims and sets up a $1.7 billion fund for allegedly targeted allies, sparking massive backlash.
The United States government has agreed to permanently drop existing tax claims against President Donald Trump.
This decision is part of a settlement to resolve Trump's $10 billion lawsuit against the Internal Revenue Service over the leak of his tax returns.
A public settlement document reveals the US is now permanently barred from examining or prosecuting current tax audits against Trump, his sons, and the Trump Organization.
Acting Attorney General Todd Blanche signed the addendum, which also protects Trump's family and affiliates. The Justice Department, however, clarified that this bar only applies to existing audits, not future examinations.
Alongside this, the Trump administration created a massive $1.776 billion "Anti-Weaponization Fund." This money is designed to compensate allies who believe they were unjustly investigated or prosecuted for political reasons.
Blanche would not rule out the possibility of January 6 rioters applying for these payouts.
The backlash has been swift. Democrats and government watchdogs heavily criticized the fund, calling it corrupt and a potential "slush fund." Even some Republican lawmakers, including Senate Majority Leader John Thune, have expressed discomfort with the arrangement.
Former IRS Commissioner Daniel Werfel noted that agreeing to stop auditing a specific person gives Trump a different set of rules from everyday Americans.
As part of the settlement, Trump will receive a formal government apology but no monetary damages. Still, dropping the current tax claims effectively shields him from potential outstanding tax liabilities.
The lawsuit began after confidential tax records were leaked, which Trump claimed caused him financial and reputational harm.
Judge Kathleen Williams dismissed the case but sharply criticized the Justice Department. She admonished the agency for failing to be transparent about the settlement details.
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