A special arrangement that could help U.S. President Donald Trump avoid paying hundreds of millions in back taxes has become a political bargaining chip during the process of confirming the U.S. Attorney General.
According to the Associated Press, in order to gain the support of two Republican senators, U.S. Acting Attorney General Todd Blandch recently submitted a written document to Congress, officially canceling a “Anti-Armeer Fund” worth approximately $1.8 billion. At the same time, he reduced the tax audit protections granted to Trump and his family. Subsequently, Republican senators John Cornyn and Tom Tillis announced their support for Blandch, thereby essentially clearing the way for his nomination as attorney general.
This negotiation involves two controversial arrangements. The so-called “anti-weaponization fund” was originally intended to compensate those who claimed to have been politically persecuted by the federal government. There is concern that Trump’s political allies, as well as those involved in the 2021 Capitol Hill riots, may receive compensation through this fund. Now, Branch has signed a written order declaring that the fund will no longer be established.
However, another direct relationship involving Trump's personal interests - tax audit protection - has not been cancelled.
According to the revised document, audit protection applies only to Trump, his two sons, Donald Trump Jr. and Eric Trump, as well as the Trump organization. The scope of protection is also limited to tax matters that existed at the time of the related settlement, excluding tax returns that Trump may submit in the future. In other words, Trump does not obtain permanent and comprehensive “exemption from scrutiny,” but his past tax issues may still be subject to review.
It is still unclear how much tax evasion Trump has committed. Previous investigations by The New York Times and ProPublica indicated that the amount involved could exceed $100 million. Two Republican senators believe that the written restrictions imposed by Branch meet their requirements. However, critics point out that the most critical issue remains unresolved: a special agreement that could exempt the current president from huge historical tax liabilities still remains in effect.
And all of this starts with the leakage of Trump’s tax returns, and the billion-dollar lawsuit he filed against the IRS.
Between 2018 and 2020, Charles Littlejohn, a former employee of the U.S. Internal Revenue Service, obtained tax information on Trump and other wealthy individuals and shared it with The New York Times and ProPublica. The reports revealed that Trump had not paid federal income taxes for many years, and some of his financial records were also questionable. Littlejohn later pleaded guilty and was sentenced to 5 years in prison in 2024.
In January 2026, Trump, who had returned to the White House, along with his two sons—Donald Trump Jr. and Eric Trump—as well as the Trump Organization, filed a lawsuit against the IRS and the Treasury Department, seeking compensation of $10 billion. They alleged that the government failed to protect taxpayer secrets, resulting in damage to their reputations, business interests, and political support.
This lawsuit was extremely unusual from the beginning: as president, Trump was essentially suing federal agencies that were under his executive authority. Subsequently, the Department of Justice under the Trump administration reached a settlement with Trump on behalf of the government, and the lawsuit was dismissed.
The settlement involves two highly controversial arrangements.
The first item is tax audit protection. The document initially signed by Brancher stipulates that the U.S. government shall no longer review or pursue any existing tax matters related to Trump and his son, the Trump Organization, and some “related individuals.” Due to the broad wording, there are concerns that Trump may use this provision to avoid paying substantial tax debts.
The second item is the establishment of a $1.776 billion “Anti-Arms Transfer Fund” to compensate those who claim to have been politically persecuted by the government. Trump has long accused the Biden administration of “arming the judicial system,” so any of his allies, or even those involved in the 2021 Capitol Hill riots, could apply for compensation. This fund quickly attracted opposition from members of both political parties.
In July, Federal Judge Katherine Williams ruled that Trump's lawsuit had an “unworthy purpose”. Essentially, the president was using legal proceedings against government departments under his control to give legal cover to subsequent agreements. The judge did not directly declare the settlement invalid, but prohibited the government from claiming that the agreement originated from a normal and genuine adversarial process. Trump has filed an appeal.
The controversy subsequently affected the nomination of Branky as Attorney General. Republican senators John Cornyn and Tom Tillis refused to support him, demanding that the Department of Justice officially cancel the fund and reduce the protection provided by tax audits.
After negotiations, Branki issued a written order on August 2, officially canceling the 'Anti-armament Fund'. The Department of Justice stated that the fund never appointed administrators, did not receive or pay any funds, and did not process any claims.
However, the protection provided by tax audits is retained. The new document specifies that its application is limited to Trump, his two sons, and the Trump organization, and does not cover those who are ambiguous in their role; it applies only to tax matters that exist at the time of settlement, and does not protect Trump’s future tax returns.
This means that Trump has not obtained a lifetime “exemption from inspection,” and his future tax returns may still be audited. However, the tax issues that have not yet been resolved may be settled. According to reports from previous investigations cited by The Associated Press, this disputed tax amount could exceed $100 million. However, it is currently unclear how much tax Trump actually owes.
After receiving the above written promises, Cornyn and Tillis announced on August 3th their support for Branch. The nomination of his attorney general is expected to proceed smoothly. The final result is that a $177.6 million compensation fund has been temporarily abolished, while Trump’s tax audit exemption remains in effect after its scope is narrowed down.
