Justice Department sued over Trump IRS audit immunity shield

Al Drago/Bloomberg

The U.S. Justice Department is facing a legal challenge to Acting Attorney General Todd Blanche’s move to immunize President Donald Trump, several Trump family members and the Trump Organization from investigations into past tax filings.

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A group of Trump administration critics filed claims on Thursday alleging the immunity guarantee, which was part of an arrangement to end Trump’s $10 billion case against the Internal Revenue Service, is unlawful. 

The allegations expand an earlier lawsuit by the group over the Justice Department’s plan to create a $1.8 billion fund for victims of alleged government “weaponization” to settle Trump’s case against the IRS.

The immunity order — which was signed by Blanche, a former personal defense lawyer for the president — bars the IRS and Treasury from auditing or bringing claims against Trump, his oldest sons Donald Jr. and Eric, and his eponymous business related to past tax documents. 

Blanche has come under fire for how the department handled Trump’s case, which sought to hold the IRS liable for a past leak of his tax information. Several Republicans in the Senate have expressed concerns about the deal as they weigh his nomination to formally step into the attorney general post, although he’s managed to assuage concerns from key holdouts so far. 

The challengers in the lawsuit, represented by liberal-leaning advocacy group Democracy Forward Foundation, are arguing that the immunity arrangement violates a section of U.S. law that bars the president from interfering with taxpayer audits. They also argue a provision of the U.S. Constitution says the president can’t accept gifts or other financial benefits from government entities, broadly referred to as “emoluments.”

The updated complaint adds the National Treasury Employees Union as a plaintiff. The union contends that its members include career IRS employees who will be compelled to carry out “unlawful directions to terminate particular taxpayers’ audits.”

“Acceding to such a request will cause NTEU members to violate their oath of office and subject them to the risk of criminal liability; refusing such a request inevitably places NTEU members at risk of retaliation,” the complaint states.

A Justice Department spokesperson did not immediately respond to a request for comment.

The lawsuit is pending before a federal judge in Alexandria, Virginia, who previously blocked the government from taking steps to launch the $1.8 billion fund while the legal fight goes ahead. 

District Judge Leonie Brinkema so far has refused to accept the Justice Department’s stance that the case is unnecessary after Blanche publicly announced the department wouldn’t create the fund in response to bipartisan opposition.

During Blanche’s Senate confirmation hearing last month, he faced questions not only about the fund, but also about the scope of the immunity protection. His order refers to “related or affiliated individuals” and “related companies, affiliates, and subsidiaries” to Trump and his co-plaintiffs in the IRS case, as well as “other agencies or departments” besides the IRS and Treasury.

Blanche released a memo several days ago stating that the Justice Department’s position is that the immunity only covers the parties in Trump’s lawsuit against the IRS and wouldn’t apply to future tax filings. He hasn’t changed the text of the original immunity order, however, prompting skepticism from critics that the memo isn’t enough to ensure it can’t be applied more broadly in the future.

The case is Floyd v. Department of Justice, 26-cv-1399, US District Court, Eastern District of Virginia (Alexandria).