Judge voids Trump IRS settlement, cites misuse of courts

U.S. District Judge Kathleen Williams voided Donald Trump’s IRS settlement in a 56-page order, calling the case a use of the court system for an improper purpose and cutting off a deal meant to protect Trump, his family and affiliated entities from tax-related fallout.

The ruling struck at a settlement that followed a January 29 lawsuit filed in Miami federal court by Trump, Donald Trump Jr., Eric Trump and the Trump Organization. That suit sought at least $10 billion over the disclosure of their tax-return information by a government contractor and stemmed from the leak scandal involving former IRS contractor Charles E. Littlejohn, who was later convicted and is serving a five-year prison sentence for leaking tax data to news organizations including The New York Times and ProPublica.

In a 56-page order, Williams said the parties were not truly adverse and that the litigation had been brought to bend the judicial process. She barred Trump, his adult sons, the Trump Organization, the Justice Department and the IRS from citing the settlement in future legal, administrative or regulatory proceedings. The settlement included a nearly $1.776 billion or $1.8 billion Anti-Weaponization Fund, a pool critics feared could be used for claims far beyond the tax dispute itself, including claims tied to Jan. 6 defendants.

She referred Trump lawyer Alejandro Brito and senior Justice Department officials who approved the settlement to state bar authorities for possible ethics review, and Daniel Epstein was limited in his ability to practice in the Southern District of Florida for at least a year. Williams directed copies of her order to the New York, Florida and Washington, D.C., bar authorities.

Thirty-five former judges raised concerns that helped prompt Williams to reopen the case, and other judges, Democrats and watchdog groups urged her to examine possible misconduct and fraud on the court. A federal judge in Virginia, Leonie Brinkema, had already blocked the administration from moving forward with the Anti-Weaponization Fund in June 2026, while the Justice Department said on May 18 that the fund was part of the settlement in President Donald J. Trump v. Internal Revenue Service.