Senate Republicans demurred last week at the chance to rein in President Donald Trump’s $1.776 billion “anti-weaponization” fund, despite indications that the slush fund is not as dead as the Justice Department has claimed. Even more troubling, the GOP opted not to touch the less blatantly corrupt part of Trump’s settlement with himself. Under the terms of an addendum from acting attorney general Todd Blanche, the Internal Revenue Service is “forever barred and precluded” from auditing the president, his companies, or the sons that joined him in attempting to shakedown the agency for $10 billion in a lawsuit against the government he leads.
Importantly, the one-page ban includes any ongoing audits that may have already begun. It also specifically applies to all tax returns filed before the settlement was put in place last month. This would cover those filed in April, which cover Trump’s first year back in office. And as even a cursory review of the Trump family’s alleged ongoing profiteering shows, any number of fraudulent claims could potentially slip through the cracks if the IRS is forbidden from reviewing any of those filings.
Any number of fraudulent claims could potentially slip through the cracks if the IRS is forbidden from reviewing any of those filings.
The slush fund itself is widely seen as a vessel for Trump to pass out cash to supporters who claimed they’d been unfairly targeted by federal investigations. Some tax experts recently told Politico that while Trump wouldn’t be getting money from the fund himself, he would potentially have still been responsible for a tax bill costing hundreds of millions of dollars. But the language of the broader settlement argued that the fund is “not taxable income as to Plaintiffs, who receive no economic benefit from this Settlement Agreement.”
In truth, there’s a potentially massive economic benefit from the settlement via the follow-up provision Blanche later added. As The New York Times has noted, an IRS audit launched in 2020 could have resulted in Trump owing $100 million or more for double-dipping on certain tax breaks. Simply causing that to go away would be a massive boon to the president and his businesses, let alone any other audits that may or may not have been underway behind closed doors. After all, the IRS has had a policy since the post-Watergate era began to automatically audit the president and vice president’s tax returns.
We already know some of what was likely in the most recent filings, thanks to a mix of mandatory disclosures and excellent journalism. Trump revealed in a federal disclosure form last month that he’s engaged in massive stock trades since January, including millions of dollars’ worth of shares in businesses that have benefited from his decisions as president. (White House spokesperson Kimberly Benza said last month in a statement to The Associated Press that “neither President Trump, his family, nor The Trump Organization plays any role in selecting, directing, or approving specific investments” and that they “receive no advance notice of trading activity and provide no input regarding investment decisions or portfolio management.”)
Meanwhile, Trump’s sons who were co-plaintiffs in the suit, Don Jr. and Eric, have also been very busy in the last year and a half making business deals that appear to have benefitted from their father’s position in multiple ways. All told, according to The New York Times’ Editorial Board, Trump, and in turn his businesses and family, “used the office of the presidency to make at least $1.4 billion.”
Tellingly, the audit addendum has nothing to do with the direct subject of Trump’s original case against the IRS. He and his sons claimed that the IRS had gravely injured them in allowing a contractor to leak the president’s returns, along with those of other public figures. But the leak happened during Trump’s first term, and the culprit was already prosecuted for stealing the documents. To ban the IRS from undertaking any current or future audits based on a theft that’s already been punished simply makes no sense.
None of this should excuse lawmakers from turning a blind eye to the apparent corruption on display
There are a few silver linings. The Justice Department said in a statement last month that the breathtaking scope of this quasi-legal tax shield “is only with respect to existing audits, not future.” Likewise, as MS NOW analyst Lisa Rubin has noted, Blanche may not have had the authority to tell the IRS what to do in this case. Unlike the main settlement, the addendum wasn’t signed by any Treasury Department officials, and the Justice Department can only settle matters that have been referred to it for prosecution or defense.
Most hopeful is the decision from a federal judge to re-open Trump’s IRS lawsuit after first agreeing to dismiss it. U.S. District Judge Kathleen Williams said that she intended to determine whether the settlement “is a product of collusion and is itself a fraud on the Court.” She was already concerned that Trump appeared to be both the plaintiff and defendant in the case and now means to examine whether the settlement was “premised on deception.”
None of this should excuse lawmakers from turning a blind eye to the apparent corruption on display. The president has already shown that he believes himself to be beyond the reach of the law. In trying to shield his family’s businesses from any scrutiny, Trump has now attempted to place himself above one of the only two constants in this world: death and taxes.
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