Trump could face tax reckoning as IRS deal ‘not worth the paper it’s written on’: expert

President Donald Trump reached an unprecedented agreement with his own Justice Department last week in which he, his family and his businesses would be granted broad tax immunity, but some experts say the agreement would be effectively worthless the moment Trump loses power, The Wall Street Journal reported Saturday, kicking off a potential tax reckoning.“[Acting Attorney General Todd] Blanche signed an agreement that is not worth the paper it’s written on – except that government personnel at present will not challenge it,” said Stuart Bassin, a former Justice Department tax litigator, speaking with the Journal.Trump reached the agreement after agreeing to drop his 10 billion lawsuit against the Internal Revenue Service (IRS) he filed over his tax returns leaking in 2019. In exchange, Trump received a nearly 1.8 billion taxpayer-funded settlement for his newly created “anti-weaponization fund,” designed to compensate those who’ve alleged to have been unfairly targeted by the Biden administration’s DOJ, including violent Jan. 6 Capitol rioters.In addition to the 1.8 billion settlement, the agreement also ended all pending audits of tax returns of Trump, his family and his businesses, despite the federal government having several plausible defenses that it never asserted,” the Journal reported.Even so, several experts pointed out several flaws in the agreement. One, the agreement left open the opportunity for states to pursue their own audits of some of the president’s tax filings.“Trump and Blanche can give away federal stuff. They can’t give away the state stuff,” Bassin told the Journal.Secondly, the IRS has no deadline for unfiled gift tax returns, noted Duke University tax law professor Larence Zelenak, speaking with the Journal.“A future IRS could contend that Trump effectively received the 1.8 billion in the settlement agreement and directed it as gifts to fund recipients,” the Journal wrote, paraphrasing Zelenak’s comments. “Under that argument, which the settlement attempts to prevent, Trump could have taxable income and taxable gifts.”And thirdly, once Trump leaves the White House, the IRS under a different administration could simply perform an audit on Trump’s tax returns, the Journal’s report reads.“Typically, the IRS gets three years to audit a return, which would likely keep returns from tax years 2025 and beyond open to examination,” the report reads. “But there are exceptions that let the IRS reach further back. The IRS has six years if there are substantial omissions of income, and an unlimited amount of time to pursue tax fraud.”