On Sunday night, August 3rd, 2026, Acting Attorney General Todd Blanche announced changes to President Donald Trump's "settlement agreement" with the Internal Revenue Service (IRS). Blanche formally rescinded his May 18 order that had established a $1.8 billion "Anti-Weaponization Fund" intended to benefit Trump supporters. He also issued a statement clarifying the scope of IRS immunity granted to Trump in a separate May 19 order.

These moves aimed to address concerns from two Republican senators who had delayed Blanche's confirmation vote in the Senate Judiciary Committee. Despite potentially clearing the way for his confirmation, Blanche's concessions underscore questions about the legitimacy of the arrangement, which he has portrayed as the resolution of a bona fide legal dispute between Trump and the IRS.

Trump's lawsuit against the IRS, which alleged damages from an IRS contractor's illegal disclosure of his tax returns, reportedly never involved a genuine controversy between adverse parties. The settlement included $1.8 billion in taxpayer funds for Trump supporters claiming abuses of power during the Biden administration. Blanche's rescinded fund and the immunity order have drawn criticism, especially as Trump continues to promote payouts to his supporters, including individuals convicted for participating in the 2021 U.S. Capitol riot.

Blanche clarified that the order stating "the United States" is "FOREVER BARRED and PRECLUDED" from pursuing any claims against Trump or his relatives applies only to IRS claims, denying that the immunity extends beyond the IRS to other agencies or departments. Analysis suggests that the immunity could save Trump more than $100 million in back taxes, interest, and penalties related to reported business losses.

Under federal law (26 USC 7217), it is unlawful for an executive-branch official to request any IRS employee to conduct or terminate an audit or investigation of a particular taxpayer's tax liability, raising further questions about the settlement's propriety.

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