The Trump Family’s IRS Exemption
This all seems to be an obvious abuse of power by the Department of Justice, by the president. He negotiated essentially with himself.— Jack Reed, U.S. Senator
In January 2026, President Trump sued the IRS for $10 billion over a failure to prevent the leak of tax information to news outlets during his first term.
U.S. District Judge Kathleen Williams later questioned whether a dispute between the president and the IRS could be heard in federal court. She set a deadline both parties to address the issue.
Days before the deadline however, Trump and the IRS reached a settlement. This settlement established a $1.776 billion “Anti-Weaponization Fund” to compensate people claiming to be victims of “lawfare,” and ordered that Donald Trump, his sons Donald Jr. and Eric, and “related or affiliated individuals” could not be audited by the IRS for tax returns filed before May 18, 2026.
The settlement listed acting Attorney General Todd Blanche, Associate Attorney General Stanley Woodward Jr. and IRS Chief Executive Officer Frank Bisignano as signatories for the United States, each of whom had previous ties to Donald Trump.
Blanche had served as Trump's defense lawyer before his second term as president.
Woodward co-founded a law firm, Brand Woodward, which defended people charged with seditious conspiracy in the January 6 attack and received $120,000 from Donald Trump’s Save America PAC.
Bisignano is a businessman who donated $125,000 to Trump’s 2020 campaign, and whose wife donated nearly $1 million to Trump’s 2024 campaign.
The day after the fund was announced, Todd Blanche faced Democrat-led pushback in a congressional hearing. Lawmakers questioned whether the fund would become a slush fund for allies of the president and January 6 rioters. Sen. Jack Reed said, “This all seems to be an obvious abuse of power by the Department of Justice, by the president. He negotiated essentially with himself. You’re his appointee, the IRS are his appointees, he’s the plaintiff.” The following day, Republican Rep. Brian Fitzpatrick told reporters, “we’re going to try to kill [the Anti-Weaponization Fund].”
After a federal judge temporarily halted the creation of the Anti-Weaponization Fund, Todd Blanche announced to the House of Representatives that the administration was “not moving forward with the fund, period.” He reiterated that the rest of the settlement would remain in place. That included the Trump family’s IRS audit exemption.
At Blanche’s confirmation hearing for attorney general on July 15, he faced pushback from both sides of the aisle. Republican Sen. John Cornyn of Texas argued that despite the DOJ’s decision, the settlement remains “enforceable as a contract” by Donald Trump.
Although Blanche did not deny the contract’s enforceability, he released a public statement restating that the Fund was not being pursued by the DOJ. He was subsequently confirmed as attorney general, with a 'yea' from every Republican senator.