U.S. District Judge Kathleen Williams voided President Trump’s $1.8 billion IRS settlement on Monday, ruling that the lawsuit underlying the deal had been filed for an improper purpose and lacked genuine adverseness between the parties.
The settlement, announced in May 2026, had granted Trump immunity from future tax audits and created a controversial “anti-weaponization fund” with $1.776 billion in federal funds intended to compensate individuals claiming they were unfairly targeted by the government. Williams’ order prevents Trump, his sons, and the Trump Organization from citing the settlement or its terms in any future legal proceedings.
In her ruling, Williams wrote that Trump “improperly” used the lawsuit “as a means of conferring legitimacy upon a course of action that they were unwilling to subject to judicial review.” She found that the parties were not truly in opposition, describing the arrangement as an effort to “provide some legitimacy to an agreement to confer immunity to people and entities affiliated with the President and to earmark billions of dollars from American taxpayers to redress grievances not defined in the law.”
Trump had filed the original $10 billion lawsuit in January 2026 against the IRS and Treasury Department over the unauthorized leak of his tax returns by former IRS contractor Charles Littlejohn. The leaked information had formed the basis of a 2023 New York Times investigation revealing Trump paid only $750 in federal income taxes in 2016 and no taxes in 10 of the previous 15 years.
The judge noted that Trump did not pursue his claims until returning to office and after appointing his former lawyer to prominent positions in the Department of Justice. Williams found it “risible to suggest that there was ever adverseness between the Parties.” She referred Trump’s attorney Alejandro Brito to the Florida Bar for potential disciplinary action and directed that a copy of her order be included in ongoing disciplinary proceedings against Acting Attorney General Todd Blanche and Associate Attorney General Stanley Woodward.
The ruling also imposes sanctions in the case, with amounts to be based on reimbursing former federal judges who had intervened to challenge the settlement. A group of 35 retired federal judges had filed a motion in May asserting that the settlement “is a product of collusion and is itself a fraud on the Court,” which prompted Williams to reopen the case for review.
The anti-weaponization fund had drawn intense criticism from both Democrats and some Republicans, who argued it could result in payments to individuals convicted in connection with the January 6 Capitol riot. In early June, the Trump administration announced it was abandoning the fund after a separate federal judge temporarily blocked it from moving forward and amid bipartisan backlash in Congress. However, the immunity provisions of the settlement had remained in place until Monday’s ruling.
Trump could appeal Williams’ order. The judge noted in a footnote that Trump and the government remain free to make a private agreement establishing an anti-weaponization fund or granting immunity, provided it is separate from the IRS litigation and not framed as a settlement in that case.
Sources
- BBC — Trump’s settlement voided, immunity provisions nullified, attorney referred for discipline
- Forbes — Judge’s ruling, sanctions imposed, referral of attorneys for disciplinary action
- NBC News — Judge found lawsuit brought in bad faith for improper purpose
- Reuters — Background on settlement and case reopening by former judges
