A Florida federal judge in a scathing order Monday said President Donald Trump filed a $10 billion lawsuit against the Internal Revenue Service “for an improper purpose” — to gain the appearance of “judicial legitimacy for a ‘settlement’ that had no viable basis in law or fact.”
That controversial out-of-court settlement with the IRS and Department of Justice in May briefly led the DOJ to create a since-abandoned $1.8 billion “lawfare” fund to compensate purported victims of prosecutorial overreach by the department.
It also led to Trump, his family members and related business entities being granted effective immunity from audits, prosecution or regulatory enforcement action by the IRS for tax returns filed up to the date of the settlement in May.
Judge Kathleen Williams, in her new order in U.S. District Court in Miami, said that because Trump has control over the DOJ and the IRS, “there was never adverseness between the Parties; there was never a case or controversy; and there was never a question as to who would prevail.”
“The Lead Plaintiff and the Government are one, a fully realized unitary interest,” Williams wrote.
However, she did not explicitly void the provisions of the settlement.
In a footnote, she pointedly wrote that the question of “whether a private agreement” between both sides is valid and enforceable “is not before this court.”
But Williams referred Trump’s lawyer in the suit, Alejandro Brito, to the Florida bar for consideration of whether Brito should be disciplined in light of her findings. The judge also
She also ordered a copy of the order to be sent to the New York State Bar, of which Acting Attorney General Todd Blanche is a member, as well as to the District of Columbia Bar, of which Associate Attorney General Stanley Woodward is a member.
Blanche, who is Trump’s former criminal defense lawyer, announced the creation of the DOJ’s compensation fund after the president dropped his lawsuit. The settlement was not submitted to Williams or any other court for review.
Trump, his adult sons Donald Trump Jr. and Eric Trump, and the Trump Organization had sued the IRS in January over the leak of his tax records by an agency contractor, who pleaded guilty in connection with that act in 2023.
Trump has nominated Blanche to serve as attorney general. The Senate Judiciary Committee is due to hold hearings on Blanche’s nomination on Wednesday and Thursday.
Williams, in her order, barred Trump, the DOJ and other parties in the case from using “the purported ‘settlement agreement'” in judicial or other proceedings as evidence of a settlement of the lawsuit.
“This action was never about a party seeking judicial resolution of a legal issue or a factual dispute,” Williams wrote in her order.
“The nature of the suit itself and the conduct of the Parties and counsel from its filing make plain that this was an attempt to use the Court to provide some legitimacy to an agreement to confer immunity to people and…
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