A federal judge voided President Donald Trump’s $1.8 billion settlement with the Internal Revenue Service on Monday, July 13, eliminating sweeping tax protections that had shielded Trump and his family from audits.
U.S. District Judge Kathleen Williams, ruling in Miami, found that Trump filed his $10 billion lawsuit against the IRS “for an improper purpose” — to gain the appearance of judicial legitimacy for a settlement he effectively negotiated with government agencies he controls as president.
“This action was never about a party seeking judicial resolution of a legal issue or a factual dispute,” Williams wrote in her 56-page order. She concluded the lawsuit was instead “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.”
The settlement, brokered in May 2026, had granted Trump, his family members, and his businesses permanent immunity from IRS audits and investigations into past tax claims. Williams’ order bars Trump, his adult sons, and the Trump Organization from referring to the settlement or citing its terms in any future legal proceedings — a ruling that could nullify the portion of the agreement protecting Trump from tax audits.
The case originated when Trump sued the IRS in January 2026 over the leak of his confidential tax returns by an agency contractor. The leaked information had formed the basis of a 2020 New York Times investigation revealing Trump paid only $750 in federal income taxes the year he won his presidency in 2016, and no taxes in 10 of the previous 15 years.
Williams found Trump did not pursue his claims until returning to the White House and appointing allies to key positions in the Justice Department. “President Trump did not pursue his claims until he once again occupied the White House and had appointed his former lawyer, and the former lawyer of persons who are putative beneficiaries of the ‘Anti-Weaponization Fund’ to prominent positions in the DOJ,” she wrote.
The judge referred Trump’s attorney, Alejandro Brito, to the Florida bar for potential disciplinary action and ordered copies of her ruling sent to state bar authorities in New York and Washington, D.C., where other officials involved in the settlement hold law licenses. She also sanctioned a second Trump lawyer, Daniel Epstein, barring him from joining cases in the Southern District of Florida for at least one year.
The settlement had been contentious from its announcement. The $1.8 billion fund created under the deal — labeled the “anti-weaponization” fund — was intended to compensate individuals claiming they were unfairly targeted by the government. Critics, including some Republican lawmakers, warned it could distribute taxpayer money to people prosecuted for the January 6, 2021 Capitol riot. A separate federal judge in Virginia blocked the administration from implementing the fund in June, and the Trump administration abandoned the plan shortly after.
Tax experts praised the ruling. Brandon DeBot, policy director of the Tax Law Center at New York University, called the settlement a “sweetheart deal” that had gone against “the tax system’s protections against political interference.” He noted that while the court’s decision was important, congressional action would be needed to prevent similar attempts at what he characterized as presidential self-dealing.
A Trump legal team spokesman responded by repeating claims that the IRS “wrongly allowed a rogue, politically-motivated employee to leak private and confidential information” and said Trump “continues to hold those who wrong America and Americans accountable.” A Justice Department spokesperson disputed the judge’s findings, saying there was “no collusion in this case” and accusing the judge of disregarding precedent.
Sources
- BBC — Judge Kathleen Williams’ ruling voiding the settlement, the $1.8 billion fund details, and the referral of Trump’s attorney for disciplinary action
- Reuters — The 56-page ruling finding Trump misused the court system, the judge’s findings on lack of adverseness, and referrals to bar authorities
- CNBC — Details on the “improper purpose” finding, the settlement’s tax audit immunity provisions, and the sanctions against Trump’s lawyers
