When the Trump administration announced its controversial legal fund popular with Jan. 6 rioters, it also gave President Donald Trump immunity from any potential tax crimes for any taxes filed up to now.
The $1.8 billion legal fund for anyone “weaponized” by Democratic presidential administrations may be closing down this week before it ever got started — unpopular with Republican lawmakerswho don’t want to defend Jan. 6 rioters before tough midterm elections and halted in courts over questions about its legality.
But acting attorney general Todd Blanche said this week he’s not backing down from giving immunity to the president over his past taxes — despite the questions about why Trump would need immunity and whether a president can do this.
“This is a breathtaking abuse of the tax and legal system,” said Brandon DeBot with the independent Tax Law Center at New York University Law in a statement.
“Presidents don’t have the authority to immunize themselves from personal liability for not paying their taxes,” said Kimberly Wehle, a professor at the University of Baltimore School of Law. “So much of this is sending the message that there is no rule of law anymore, there are no restraints on the president, and the law is whatever Donald Trump says it is. And that’s a legal absurdity.”
Here’s what to know about it.
What the immunity deal is
Trump had been seeking as much as $10 billion in damages for the theft of tax filings by a former IRS consultant, who then leaked them to news organizations.
When Trump ended his lawsuit against the IRS months after he filed it, the Justice Department (run by Trump’s former personal lawyer) issued a one-page, sweeping statement saying the IRS would back off from any scrutiny of Trump’s taxes.
It was framed as a settlement: In exchange for Trump dropping the lawsuit, the government agreed to “forever” bar the IRS from auditing Trump over tax filings he’s made up until now. That means no audits and no prosecution of potential tax crimes.
The deal also encompasses immunity for his family, businesses, trusts and “affiliated individuals.”
“It essentially bans the federal government from enforcing federal laws against Trump, his sons, his companies, and ‘affiliated entities’ regarding ‘any matters’ that ‘could be pending’ (specifically including their tax returns),” explains Wehle in her newsletter, “The Little Law School With Kim Wehle.”
It’s not clear what, if any, existing audits there were regarding the president. He spent four years out of office, and his financial ties were greatly scrutinized by courts before a jury found him guilty of business fraud in the state of New York two years ago. Trump has often complained that he has been the subject of punishing, years-long tax inquiries.
Trump has been making a lot of money as president
He has been unabashedly trading millions in tech stocks and an estimated $100 million in stocks and bonds overall. He and his family have made a lot of money using Trump’s name and likeness in cryptocurrency, put his name on product such as hats and cologne and started a struggling social media company. Trump’s family company, run by his children, is making real estate deals in the Middle East.
Tax experts say in theory, the deal could let Trump cheat on his taxes and avoid scrutiny.
“It makes you wonder what the President has to hide in those tax returns,” former IRS commissioner John Koskinen told Politico. “He’s apparently been actively trading in the stock market and, since he knows a lot more about situations than the average investor, he’s probably generated significant taxable earnings. Not auditing his returns is the same as giving him an easy way to, in effect, receive money from the government.”
“There are no conflicts of interest,” White House spokesperson Anna Kelly told the Associated Press this week.
Can this deal be stopped?
Yes, say legal experts I’ve talked to. This is not an official legal settlement. It’s an agreement between Trump and the current Justice Department that was never approved by a judge.
A future presidential administration could still look into Trump’s taxes.
As for prosecuting him, if it came to that, the Supreme Court has granted immunity to all former presidents — but only for official acts. “It’s hard to argue cheating on your taxes is an official act,” Wehle said.
And no Supreme Court ruling covers a president’s children or his business.
In the immediate term, legal experts say to watch the federal court in Florida where the $10 billion lawsuit was filed. Trump and the Justice Department dismissed the case months after he filed it.
But in an extraordinarily rare move, the judge who was overseeing the case reinstated it last week, not to pursue whether the government owes Trump $10 billion but rather to look into whether the whole lawsuit constituted an act of fraud.
“A party’s decision to file a frivolous lawsuit for the sole purpose of forcing a settlement may qualify as such an improper purpose,” said U.S. District Judge Kathleen M. Williams.
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