A federal judge on Monday voided President Donald Trump’s $1.776 billion settlement with the Internal Revenue Service, finding that the agreement improperly granted Trump sweeping tax protections and was never a genuine legal dispute.
U.S. District Judge Kathleen Williams, based in Miami, ruled that Trump and the Department of Justice were not truly adverse parties, as the Constitution requires for civil lawsuits. Williams wrote that Trump had control over the government’s legal strategy through an executive order issued in February 2025 “to ensure Presidential supervision and control of the entire executive branch,” making the case impossible to lose.
“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 entities affiliated with the President and to earmark billions of dollars from American taxpayers to redress grievances not defined in the law,” Williams wrote in her 56-page ruling.
The settlement, brokered in May 2026, granted Trump immunity from IRS audits on past tax returns filed before May 19, 2026, extending protections to his family members and affiliated companies. Trump had sued the IRS in January 2026 for $10 billion, accusing the agency of failing to prevent the leak of his tax records during his first term. The agreement also created a nearly $1.8 billion “anti-weaponization fund” to compensate people the Trump administration claimed were victims of government overreach.
Williams noted that the DOJ, which represented the IRS in the case, did not file a single document indicating the government’s position during the 109 days the lawsuit was pending before the settlement was announced. This absence of actual legal opposition was central to her finding that the case lacked the adversarial nature required by the Constitution.
The judge’s order bars Trump, his adult sons, and his companies from referring to the settlement or citing any of its terms in future legal proceedings, effectively nullifying the tax protection provisions. Williams also referred Trump’s personal lawyer, Alejandro Brito, and senior Justice Department officials to state bar authorities to determine if their actions violated legal ethics rules. Acting Attorney General Todd Blanche, who signed the settlement agreement on behalf of the government, faces a Senate confirmation hearing this week for his nomination to serve as permanent attorney general.
The Trump administration had already begun backing away from the settlement under bipartisan criticism. In early June, Blanche announced the “anti-weaponization fund” would not move forward, and a federal judge in Virginia subsequently blocked the fund indefinitely. However, the tax immunity provisions remained in effect until Williams’ ruling Monday.
Sources
- Reuters — Judge’s 56-page ruling voiding settlement, finding lack of adverseness, referring lawyers for discipline
- Al Jazeera — Judge’s characterization of settlement as self-dealing, referral of lawyers to bar authorities
- USA Today — Details of settlement terms, tax protections, judge’s reasoning on Trump’s control of DOJ litigation strategy
