Immunity from tax scrutiny for President Donald Trump and his family is putting the IRS in an awkward position, former top government officials said.
The administration is for now sticking with the agreement barring the IRS from pursing pending audits of Trump, his family and businesses and blocking future audits of already filed returns. That comes even as Trump agreed to drop the $1.8 billion fund for victims of government “weaponization” after rare pushback from fellow Republicans.
The no-audit promise puts the IRS in a tight spot. The tax code generally prohibits presidents and heads of agencies from directing audits and IRS workers who carry out the ask are at risk of prison time and fines. Former officials said procedures will have to be put in place to give IRS workers involved some shields so they feel comfortable working on the issue.
“It’s so unprecedented that it’s just something that I don’t know how this is going to be executed,” said Nina Olson, former longtime National Taxpayer Advocate who’s now executive director of the Center for Taxpayer Rights. Olson signed onto an amicus brief filed in the case urging the judge to examinethe conflict of interest.
IRS employees will also be considering what exposure they have once Trump leaves office and another president decides to investigate the handling of the case. In 2025, two IRS employees were put on leave for their association in a scandal that was over a decade old.
The immunity, declared in a sparse memo issued by acting Attorney General Todd Blanche—Trump’s former personal lawyer—also threatens the agency’s ability to collect revenues. Some taxpayers will chew over whether the tax system is rigged and if they should pay their taxes, former officials said.
Blanche said at a congressional hearing Tuesday that the while the tax probe part of the deal will remain active, it isn’t for future immunity.
The IRS and Department of Justice didn’t respond to a request for comment.
Executing the Deal
Trump, his sons Donald Jr. and Eric, and the Trump Organization sued the IRS and Treasury Department for at least $10 billion over the data breach that occurred during Trump’s first term, spurring multiple news reports detailing Trump and other wealthy Americans’ tax returns.
Trump withdrew the lawsuit after DOJ and his personal lawyers came up with an agreement on the establishment of the fund and audit protections.
A federal judge ordered Trump last week to respond to allegations that his deal with the government was a result of a “fraud” on the court. The president’s attorneys have until June 12 to respond to a request from former federal judges that US District Judge Kathleen Williams reopen the case.
The IRS portion of the deal—dropping the audits—likely won’t begin to unfold until after the agreement is hashed out in court, though it’s expected to fall into the hands of the IRS CEO Frank Bisignano, Chief Tax Compliance Officer Jarod Koopman, and the agency’s Small Business/Self Employed Division.
Olson said if Treasury Secretary Scott Bessent issues an internal directive, political interference laws would be violated.
The three-paragraph order signed only by Blanche doesn’t detail the tax years or taxpayers covered. While the attorney general has broad settlement authority, which the Trump administration is leaning on, only the IRS can end audits, former officials said.
“As steward of the integrity of the tax system, the IRS should first determine whether there is sufficient legal authority for DOJ to direct the agency to provide audit immunity to a specific taxpayer,” said Danny Werfel, IRS commissioner under the Biden administration, adding he’d wait to move forward until the court weighs in. Werfel writes an opinion column for Bloomberg Tax.
Any IRS employee tasked with executing the agreement could be at risk with liability. The top lawyer at the Treasury Department, Brian Morrissey, stepped down in the wake of the deal.
Political Influence
A whiff of political influence at the IRS historically is accompanied by lawmakers grabbing their pitchforks. Keeping the IRS nonpartisan is something both Democrats and Republicans have agreed on. But it depends on who is doing the influencing.
Over a decade ago, a watchdog found the IRS’s tax-exempt division flagged conservative-leaning nonprofit applications for added scrutiny, spurring investigations and congressional hearings. It was later found that the IRS was also flagging progressive groups.
The handling of nonprofit applications is something that still draws ire from the Trump administration. Two IRS employees were put on administrative leave in 2025 over their ties to the issue.
In Trump’s case, Democrats and some Republicans banded together to oppose over the creation of the fund, threatening to derail immigration enforcement funding over it.
An IRS that carries out the Trump immunity agreement will leave some taxpayers calculating the risk of not filing their taxes.
“If people don’t have confidence that the IRS is run by professionals, they’re gonna go, ‘Well, why should I pay my taxes? Because there’s a Republican president and I’m a Democrat, so I don’t have to file my taxes,’” said Gil Rothenberg, former chief of the DOJ Tax Division appellate section. Rothenberg also signed onto the brief urging the judge to examinethe conflict of interest in this case.
Werfel, however, warned taxpayers of making a short-term decision on whether to file.
“Conduct that escapes scrutiny today may still be examined three, four, or six years from now depending on the issue,” Werfel said. “By then, enforcement priorities, staffing levels, or technological capabilities— including more advanced AI-driven analytics—could look very different.”