Republicans Aren’t Sure They Can Block Trump’s IRS Audit Exemption

A proposed settlement between the IRS and Donald Trump that would exempt the president, his family and their businesses from tax scrutiny has sparked some concern among congressional Republicans who say they’re not sure they can block it.

The minimal pushback is in sharp contrast to the blowback from lawmakers over another piece of the tax settlement, which would have allowed Trump to create and control a $1.8 billion “anti-weaponization” fund to make payouts to purported victims of government attacks.

After a revolt among Republican lawmakers, acting Attorney General Todd Blanche told Congress the Department of Justice would nix the administration’s controversial fund.

But the ban on the IRS conducting audits into President Donald Trump, his family and their “affiliates” is still on the table. Many Republicans told NOTUS they do have serious concerns about the IRS provision and the president’s ability to settle with his own government in the first place, but they’re not sure they can block it.

The deal immunizes the Trump family and their businesses from any investigation into their taxes filed before the deal was struck in May. The New York Times previously reported that the deal could free the president from more than $100 million in tax penalties.

Though Republican senators delayed a vote on their party-line spending bill to fund Immigration and Customs Enforcement for two weeks over concerns about the anti-weaponization fund, most haven’t sounded the alarm over the immunity deal.

Sen. Lisa Murkowski (R-Alaska), the sole Republican to oppose the party-line ICE funding package to protest the “anti-weaponization” fund, said that IRS exemption has given her pause since it was first announced.

But, Murkowski added, she doesn’t know exactly how Congress could legislate to stop the audit ban either.

“How can we address this?” Murkowski said. “I don’t know if there is an opportunity going forward but it is something that I have expressed concerns about. I don’t know whether or not an agreement like this is standard with the IRS or whether it raises issues that the president and his family were treated differently.”

Senate Democrats have pushed back. Senate Minority Leader Chuck Schumer tried to call up a proposal in the Senate on Tuesday to bar the audit exemption that was blocked by Republicans. The Senate Finance Committee also delayed a markup of a bipartisan tax bill over concerns from Democrats about the audit dispute.

Sen. John Cornyn (R-Texas), who has been an outspoken critic of the settlement, said that he discussed the issue with Blanche in a meeting on Tuesday. After the meeting, Cornyn said he won’t make a decision on whether to vote to confirm Blanche until he is briefed further on the audit provision.

“It was a positive meeting, he answered my questions and committed to an additional briefing on the tax audit issue,” Cornyn said of his conversation with Blanche. “I’m looking forward to reviewing that.”

Sen. James Lankford (R-Oklahoma) also told NOTUS that he’d be interested in seeing Congress take a look at the provision but emphasized Cornyn’s point that more details are necessary.

“We don’t have a lot of the details on that yet, but it seems very, very broad,” Lankford said,

Steve Wamhoff, the director of federal tax policy at the nonpartisan Institute on Taxation and Economic Policy, said that there’s confusion among both lawmakers and experts on how to deal with the provision since a settlement between a president and his own federal government is unprecedented.

“It’s strange to have the president of the United States suing the federal government, because that’s sort of like the president is on both sides of that litigation,” Wamhoff said.

Wamhoff said he’s not sure how Congress could legislate around the audit ban but suggested it’s something that could be addressed in federal court, giving lawmakers some wiggle room.

“The tax code says that the executive branch cannot influence the IRS over investigations and audits,” Wamhoff said. “I don’t know what the timeline on that would be, but it’s possible that it will be taken care of without Congress intervening.”

Sen. Bill Cassidy (R-Louisiana), who also serves on the Senate Finance committee, shares Wamhoff’s concerns but said he still “has to see what’s possible” out of Congress before he’d advocate for legislation to undo the settlement.

“I agree with the former judges who said, was there really somebody in opposition here?” Cassidy said. “You can’t have somebody on both sides of an appeal who is actually not in opposition. The precedent they quote doesn’t really seem to be a true precedent.”

Sen. John Curtis (R-Utah) told NOTUS that he’s also unsure about Congress’ ability to legislate around the audit ban. Congress has to be realistic about what it can reasonably tackle even when lawmakers are opposed to a provision, he said.

“We can’t legislate on everything we don’t like … Certainly, it would be nice to take care of it, but I’m realistic,” Curtis said, adding that senators had to pick “one big thing” to focus on as part of the party-line spending bill.

Senators critical of the fund would also have to have buy-in from House Republicans in order to pass legislation limiting the scope of the audit ban. Rep. Jason Smith (R-Missouri), who chairs the Ways and Means Committee responsible for writing tax laws, told NOTUS that he opposes Congress passing a bill to allow audits of Trump.

“What I’m more concerned with is President Trump has been audited for over ten years before he was president,” Smith said. “The IRS should not be doing that.”

Other Republicans said that the president’s settlement is not important to voters, who are more concerned with issues like safety, homeland security and the cost of living. “I don’t know anything about it,” Rep. Mark Amodei (R-Nevada) said of the IRS audit.

Moreover, the party has long prized tax cuts and been critical of the IRS’ powers, including its auditing powers. Congressional Republicans were solidly behind Trump’s recent moves to cut tens of thousands of IRS jobs.

And some Republican senators have shut the door on considering legislation that would limit the scope of the settlement between Trump and the IRS at all.

Sen. Cynthia Lummis (R-Wyoming) told NOTUS that the audit ban is no different from presidential pardon power, comparing the measure to former President Joe Biden’s pardon of his son and other members of his family at the end of his term.

“Any president can pardon themselves and their family members –– Joe Biden set that precedent,” Lummis said. “It’s just so futile now that Biden pardoned everybody and set the precedent for future presidents to do the same thing.”