Judge calls Trump IRS tax deal improper, targets DOJ leaders
A federal judge has ruled that Donald Trump’s $10 billion lawsuit against the IRS was an improper exercise in self-dealing, undermining the legitimacy of a settlement that granted the president tax audit immunity and attempted to direct $1.776 billion in public funds to political allies.
A US federal judge has ruled that Donald Trump’s $10 billion lawsuit against the Internal Revenue Service was filed for an “improper purpose,” rejecting the legitimacy of a settlement that granted the president tax audit immunity and attempted to earmark $1.776 billion in taxpayer money.
U.S. District Judge Kathleen Williams accused Trump and his legal team of manipulating the court system by suing a federal agency under his own control. Because the executive branch effectively sued itself, the parties lacked the adverse interests required for a legitimate legal proceeding.
The January lawsuit, which centered on the leak of Trump’s tax returns between 2018 and 2020, culminated in a May settlement. The deal created a $1.776 billion “Anti-Weaponization Fund” to compensate Trump allies for legally undefined grievances, alongside sweeping audit protections for the president and his family.
While the administration abandoned the fund amid bipartisan backlash, it intends to proceed with the tax immunity provisions. Williams stopped short of explicitly voiding that immunity but barred the government from claiming the agreement was the product of a lawful process.
“Whether Executive Branch actors can privately agree to give themselves and their former clients blanket immunities and billions of dollars in tax monies for legally undefined grievances was never an issue advanced to this Court,” Williams wrote. She concluded that the parties could not use the courts to legitimize such an arrangement.
The ruling poses immediate risks for the Department of Justice’s leadership. Williams ordered her ruling sent to ethics committees in New York and Washington, D.C., targeting Acting Attorney General Todd Blanche and Associate Attorney General Stanley Woodward over their roles in brokering the deal.
Williams highlighted that Blanche previously represented Trump, while Woodward defended January 6 defendants. She noted they agreed to a settlement involving a “staggering amount of money potentially benefitting former clients” rather than defending the lawsuit or recusing themselves.
This scrutiny arrives ahead of Blanche’s Wednesday confirmation hearing before the Senate Judiciary Committee. Williams pointed to Blanche’s recent congressional testimony, where he claimed the authority to speak for both sides of the lawsuit before disavowing the fund, as proof that only one party’s interests were represented.
The judge also imposed direct professional consequences on Trump’s private attorneys. Attorney Alejandro Brito was referred to the Florida bar for potential discipline, and Daniel Epstein was banned from filing in the Southern District of Florida for up to a year.
