Trump’s attorneys, Justice Dept. leaders misused courts in IRS case, judge says

Judge Rules Trump’s Lawsuit Against IRS Was 'Exercise in Self-Dealing'

U.S. District Judge Kathleen Williams ruled Monday that President Donald Trump improperly used a $10 billion lawsuit against the Internal Revenue Service to extract personal benefits from the government he oversees. In a 56-page opinion, Williams characterized the legal action as an attempt to manipulate the judicial process and found it was brought in bad faith for an improper purpose.

The lawsuit, filed in January in the Southern District of Florida, accused the IRS and Treasury Department of failing to prevent the leak of the president's tax information to news outlets between 2018 and 2020. The leaks involved a government contractor, Charles Littlejohn, who pleaded guilty in 2024 and was sentenced to five years in prison.

Judge Williams, an appointee of President Barack Obama, concluded that the lawsuit was not intended to resolve a factual dispute or vindicate rights. Instead, she wrote that it was an effort to provide legitimacy to an agreement to earmark billions in taxpayer funds and confer immunity to entities and people affiliated with the president.

The Settlement and 'Anti-Weaponization Fund'

In May, the administration announced a settlement that granted Trump and his family protection from tax audits. The deal also established a $1.776 billion “Anti-Weaponization Fund” to compensate allies who believed they were targets of lawfare or government weaponization. This fund was intended to pay claims stemming from the classified documents case and events of January 6, 2021.

The fund was later abandoned following bipartisan backlash and a separate ruling from a federal judge in Virginia. While Acting Attorney General Todd Blanche told Congress in June that the fund would not move forward, he maintained the tax amnesty provision, which prohibits the IRS from investigating the president, his family, or his businesses for conduct pre-dating the deal.

Judge Williams described the specific fund amount as a ‘branding’ effort rather than a calculated sum of damages. She further stated that the tax amnesty order directly contravenes federal law that prevents executive branch leaders from influencing tax audits.

Sanctions and Legal Ethics

The ruling imposes sanctions on several attorneys and refers officials for disciplinary review. The judge cited a lack of adverseness between the parties, noting that as president, Trump has jurisdiction over the very agencies he sued.

• Alejandro Brito: The attorney who filed the case was referred to the Florida bar for potential disciplinary action.
• Daniel Z. Epstein: The vice president of America First Legal is barred from filing in the Southern District of Florida for one year.
• Todd Blanche and Stanley Woodward: The judge ordered her ruling be sent to state bars in New York and the District of Columbia, where ethics complaints are already pending against the Acting Attorney General and Associate Attorney General.

Williams raised concerns regarding the roles of Blanche and Woodward, noting that both had previously represented clients who stood to benefit from the settlement. She wrote that instead of recusing themselves, the lawyers agreed to a settlement involving a staggering amount of money potentially benefiting former clients.

The judge also expressed concern over Blanche's June congressional testimony. While Blanche claimed the court had no role in reviewing the agreement, Williams described that answer as at best, misleading and, at worst, disingenuous.

Impact and Response

While the lawsuit was voluntarily dismissed months ago, Williams barred Trump, his adult sons, and the Trump Organization from citing the settlement terms in any future official or judicial proceedings. This move could nullify the protections against IRS audits.

The ruling followed an inquiry triggered by a brief filed by a group of retired judges who accused the administration of a fraud on the court.

A spokesperson for Trump's legal team did not address the ruling directly, instead stating that the IRS wrongly allowed a rogue, politically-motivated employee to leak confidential information to left-wing news outlets and that the president continues to hold those who wrong America and Americans accountable.

The ruling comes as Acting Attorney General Todd Blanche prepares to face the Senate Judiciary Committee on Wednesday for his confirmation hearing to become the permanent head of the Department of Justice.