WASHINGTON — The day after acting Attorney General Todd Blanche said the Trump administration’s “anti-weaponization” fund was dead, Treasury Secretary Scott Bessent evaded questions on Capitol Hill Wednesday about whether President Donald Trump, his family and the Trump Organization would be absolved from future tax enforcement, another part of the president’s IRS settlement.

During a budget oversight hearing before the U.S. Senate Committee on Finance, Bessent repeatedly cited “ongoing litigation” to sidestep lawmakers’ inquiries into the settlement details the administration negotiated to voluntarily drop Trump’s multibillion-dollar lawsuit against the IRS for the 2019 leak of his tax returns.

Committee Chair Mike Crapo said he wanted to give Bessent a chance to “set the record straight, understanding there is ongoing litigation.”

“What can you share with us about Treasury and the IRS role in the settlement agreement, specifically since IRS CEO Frank Bisignano signed the settlement agreement?” Crapo of Idaho asked.

Bessent responded that Treasury was represented in the case by the Department of Justice and so “any additional questions about the settlement or the fund should be addressed to the Justice Department and acting Attorney General Todd Blanche.”

Sen. Ron Wyden, the committee’s top Democrat, said during opening remarks that Bessent “owes the committee an explanation of what the Treasury knows about the dirty settlement.” 

“That’s because his department was involved from beginning to end,” the Oregon senator added. “Treasury was a defendant and a negotiator in the lawsuit.”

Moments later, Wyden asked, “Does the IRS audit immunity given to Trump, his family, and his businesses still stand? I’d like a yes-or-no answer to that. I got five minutes, I’m gonna use them for these questions, okay, so that we understand what’s at stake here. This immunity deal is the biggest scam against the taxpayer in American history.”

Bessent responded: “As Albert Einstein said, that doing the same thing, expecting a different answer is the definition of insanity.”

“You’ve given no answers on this subject, and that’s why I’m going to ask these questions,” Wyden said.

“Because, as I said, there’s ongoing litigation,” Bessent replied.

Fund fails to launch

Trump, his sons Donald Trump Jr. and Eric Trump, as well as the Trump Organization sued the IRS and the Department of Treasury for $10 billion in damages for leaking his tax returns to news outlets. The contractor responsible for the leak was sentenced in early 2024.

On May 18, the Department of Justice announced the creation of a nearly $1.8 billion “anti-weaponization” fund for “victims of lawfare.”

Under intense worry, even from Republicans, that Jan. 6 defendants who assaulted police could receive reparations, Blanche told lawmakers Tuesday that the DOJ would “not be moving forward with the fund.”

The creation of the fund had mired Senate Republicans’ path to approving a bill that would fund immigration enforcement for multiple years. Trump had wanted the bill on his desk by June 1.

‘FOREVER BARRED’

But lawmakers are still searching for a clear answer on the department’s May 19 settlement addendum declaring “The United States RELEASES, WAIVES, ACQUITS, and FOREVER DISCHARGES each of the Plaintiffs from, and is hereby FOREVER BARRED and PRECLUDED from prosecuting or pursuing, any and all claims, counterclaims, causes of action, appeals or requests for relief … including tax returns filed before the Effective Date.”

Senate Democrats and legal advocates representing multiple plaintiffs in lawsuits challenging the settlement criticized the arrangement Tuesday.

The Department of Justice did respond to a request for comment, and the White House referred States Newsroom to the DOJ and the Trump Organization.

WASHINGTON — The 2026 tax filing season closed Wednesday with the Trump administration and Republicans on Capitol Hill hailing success under last year’s massive tax cuts law, while Democrats said any benefits have been wiped out by skyrocketing gas prices, inflation and more.

More than 53 million Americans claimed at least one new benefit, averaging a tax cut of $800, under the tax cuts and spending package passed by congressional Republicans and enacted by President Donald Trump on July 4, according to the Department of the Treasury.

Originally titled the One Big Beautiful Bill Act, but rebranded by Republicans as the Working Families Tax Cuts law, the measure made permanent Trump’s 2017 reduced tax brackets. 

It also quadrupled the state and local tax deduction cap and increased the child tax credit by $200.

Democrats marked Tax Day by criticizing the law and pointed to increasing inflation and tariff costs as wiping out the value of tax relief, as both sides try to gain the advantage in messaging ahead of crucial midterm elections that will determine control of Congress.

Tips, car loans, overtime

The new law cut taxes on tips until 2028 and on qualifying car loan interest until 2029. 

As for Trump’s campaign promise for no tax on overtime, the law applies the advantage on up to $12,500 in overtime earnings for individuals, and $25,000 for joint filers, through 2028. 

Additionally, eligible senior citizens can now deduct up to $6,000 for individuals, $12,000 for couples, until 2029.

Treasury Secretary Scott Bessent said in a Tax Day statement that Trump’s leadership upholds “the foundational principle that hardworking Americans should be rewarded, not punished with tax hikes, and the results of this tax season prove it.”

According to Internal Revenue Service statistics to date and made public Wednesday:

• Six million filers claimed no tax on tips, with an average deduction of $7,100.
• Twenty-five million filers claimed no tax on overtime, averaging a $3,100 deduction.
• Thirty million seniors claimed the enhanced senior deduction, receiving an average break of $7,500.
• One million Americans deducted car loan interest, getting a $1,800 break on average.

Bessent, acting IRS commissioner after a turnover of six IRS commissioners in 2025, said the agency has “worked tirelessly to ensure our tax system works for the people it is meant to serve.”

“From the shop floor to the kitchen table, taxpayers are feeling the difference of the largest tax cuts in our nation’s history, and millions of Americans are keeping more of what they earn and seeing their paychecks go further than ever before,” Bessent said.

The White House circulated a collection of statements from taxpayers Tuesday praising the new deductions. 

Trump also held a photo opportunity Monday, when he received a McDonald’s delivery from a self-proclaimed “DoorDash Grandma” who lauded tax relief on her tips in a planned event. Trump subsequently pulled cash from his pocket and handed it to the woman, Sharon Simmons of Arkansas, who represented the tech delivery service. 

Simmons, no newcomer to such GOP appearances, also testified before the U.S. House Ways and Means Committee in late July 2025, following the passage of the tax law, to praise the no tax on tips policy.

134 million income tax returns

Frank Bisignano, IRS chief executive officer, told Senate tax writers on Capitol Hill Wednesday that the 2026 filing season was the “most successful tax filing season in IRS history.”

Trump created the IRS CEO position last year. Bisignano also serves as the commissioner of the U.S. Social Security Administration.

“This landmark legislation forms the cornerstone of the administration’s growth agenda. The latest numbers tell the story,” Bisignano told the Senate Committee on Finance during the panel’s annual oversight hearing examining tax collection.

The agency to date has seen over 134 million income tax returns filed for 2025 earnings, with 98% of them done electronically, according to IRS data. Bisignano hailed the issuance of 80 million refunds that on average totaled $3,400, up by 11% compared to 2024. 

Senate Democrats on the panel panned the cost of the new tax regime and questioned whether a shrinking IRS staff will contribute to less enforcement. 

Sen. Michael Bennet, D-Colo., said “the lack of cops on the beat at the IRS is going to cost the Treasury in the United States $646 billion in unpaid taxes by the wealthiest people in America.”

According to reports, roughly 26,000 employees left the IRS last year as part of Trump’s civil service reduction incentives and firings.

“I remember you saying when you and I met before your confirmation that you are deeply concerned about the level of national debt in this country,” Bennet said to Bisignano. “It is $38 trillion and a lot of that is because of the completely unpaid-for tax bill that is the Trump tax bill.”

The cost of the tax bill will be realized in years to come, according to congressional scorekeepers.

The nonpartisan Congressional Budget Office and Joint Committee on Taxation estimated the law will cost $3.4 trillion over the next 10 years —  more than $4 trillion if accounting for interest that will accumulate on the nation’s debt.

An analysis by the Tax Foundation, which generally advocates for lower taxes, found tax revenue coming into U.S. coffers will drop by nearly $5.2 trillion over the next decade. Individual income taxes have been the government’s largest single source of revenue since 1944, according to data compiled by the Tax Policy Center, a partnership between the Urban Institute and Brookings Foundation.

How the tax cuts were offset

Lawmakers who wrote the massive tax law accounted for some of the lost revenue by overhauling eligibility and work requirements for government health and food assistance for low-income Americans. 

According to a recent report from the progressive Center on Budget and Policy Priorities, roughly 2.5 million Americans have lost Supplemental Nutrition Assistance Program, or SNAP, benefits since the tax law came into effect.

The CBO estimated the law’s changes to work requirements for Medicaid, the government’s low-income health care program, will result in millions of Americans losing health insurance. 

Senate Republicans defended the law, saying it helped Americans by avoiding “the largest tax increase in American history.”

“Had the 2017 tax cuts expired, taxpayers earning less than $400,000 would have faced a more than $2.6 trillion tax hike over the next decade,” said Senate Finance Committee Chair Mike Crapo, R-Idaho. 

Pilot program canned

The panel’s highest-ranking Democrat, Sen. Ron Wyden, D-Ore., slammed the new law for terminating a free alternative for tax filing, IRS Direct File, enacted under former President Joe Biden’s own budget reconciliation megabill.

The limited pilot program offered a free filing portal directly through the IRS and was available to 19 million taxpayers in 2024.

“Direct File in America died on Mr. Bisignano’s watch,” Wyden said, adding the program’s termination again puts taxpayers at the mercy of “tax software giants who overcharge for a service that ought to be free.”

Rather, the IRS offers Free File, an option available to taxpayers under a certain income level, now capped at $89,000, via a handful of tax preparation software companies that contract with the federal government.

A 2019 Treasury Inspector General for Tax Administration report described the program as “fraught with complexity and confusion.” Estimates show roughly 14 million free-file-eligible taxpayers were led to pages where they were prompted to pay for add-ons and extra services.

Taxpayers at any income level have the option to file for free via fillable PDF forms, but that option requires manual entry without guided prompts.

Wyden said the arrangement is a “multi-billion dollar rip-off.”

Bisignano called Direct File an “unnecessary and less popular duplicate of programs.”

Dems continue ‘affordability’ argument

The Democratic National Committee pounced on Tax Day to highlight Trump’s policies and use of taxpayer funds. Affordability is front and center in the upcoming midterm elections.

Though Trump campaigned on lowering prices and taxes, DNC Chair Ken Martin said in a statement the president has so far given Americans “a reckless trade war that has hiked prices, and a deadly and costly taxpayer-funded war with Iran.”

“This Tax Day, Americans are seeing lower-than-promised refunds hit their bank accounts that won’t even cover the higher costs Trump has forced them to shoulder. It couldn’t be clearer: Trump and the Republican Party are on the side of billionaires, big corporations, and wealthy special interests,” Martin said.