A federal judge on Monday voided the $1.8 billion settlement between President Trump and the Internal Revenue Service, ruled that Trump filed the underlying case for an 'improper purpose,' and referred one of the president's lawyers to the Florida Bar for possible discipline.
U.S. District Judge Kathleen Williams's 56-page order in Miami effectively erases the deal that in May had granted Trump, his sons and the Trump Organization immunity from IRS audits and had bankrolled a $1.776 billion 'anti-weaponization' fund to compensate purported victims of federal prosecution. It lands two days before acting Attorney General Todd Blanche, who signed the settlement documents, faces the Senate Judiciary Committee for his confirmation hearing.
What the ruling does
Williams, appointed by President Barack Obama, barred the Justice Department, IRS and Trump from citing the deal in any judicial, administrative or regulatory proceeding as evidence that the underlying case was resolved. Trump 'improperly employed this lawsuit to justify a particular award in this matter — access to taxpayer funds and exemption from audits and other investigations — which was accomplished by leveraging control over Defendants,' Williams wrote. She also concluded that Trump and his two oldest sons 'acted in bad faith.'
The lawyers
Williams referred Alejandro Brito, Trump's counsel in the suit, to the Florida Bar for possible disciplinary action, and blocked a second attorney, Daniel Epstein, from joining cases in the Southern District of Florida for at least a year. She directed copies of the order to the State Bar of New York and the District of Columbia Bar. Blanche, a member of the New York bar, and Associate Attorney General Stanley Woodward, a member of the D.C. bar, signed the settlement papers.
How it started
Trump, his sons Donald Trump Jr. and Eric Trump, and the Trump Organization sued the IRS in January over the leak of Trump's tax returns by a former agency contractor, who pleaded guilty in 2023. The parties reached the out-of-court settlement in May, before Williams could rule on jurisdiction. Blanche unveiled the $1.776 billion fund the same month, then said in early June that the department was 'not moving forward' after another federal judge in Virginia temporarily blocked payouts and lawmakers from both parties objected. Monday's ruling followed a request from 35 former judges to reopen the case. One provision of the settlement — permanently barring the IRS from pursuing tax claims against Trump, his oldest sons and their company — was not before Williams and remains intact.
The response
A spokesman for Trump's legal team said the IRS 'wrongly allowed a rogue, politically-motivated employee' to leak the president's tax information and that Trump 'continues to hold those who wrong America and Americans accountable.' A Justice Department spokesperson told CNBC there was 'no collusion in this case' and that 'the partisan judge who speculated otherwise has disregarded decades of precedent.' The White House referred questions to the legal team. Today's dossier drew only from center-lean outlets — CBS News, CNBC and BBC — and no independent conservative reporting of the disciplinary referrals was in the pool at press time.
Blanche's Senate confirmation hearing begins Wednesday, and senators are expected to press him on the settlement, the fund and the copy of Williams's order routed to his New York bar.