A federal judge in Miami has moved to reinvestigate the settlement of Donald Trump's lawsuit against the Internal Revenue Service, signaling skepticism about a deal that granted the Trump family protection from future audits and created a controversial $1.8 billion compensation fund.
Judge Kathleen Williams issued the order Friday after a group of 35 retired federal judges submitted a motion challenging the legitimacy of the settlement. The former judges argued the deal appeared designed to shield Trump from judicial review and to funnel taxpayer money to the president's allies without proper congressional authorization.
Trump had sued the IRS for $10 billion after his tax returns were leaked by a former contractor. He dropped the lawsuit last week, and the Justice Department announced the settlement would bar the federal government from ever auditing Trump family tax returns. The same deal created the "anti-weaponization fund" to compensate people claiming persecution by the federal government.
In her order, Williams demanded that Trump's attorneys answer specific questions by June 12, including whether the president colluded with his own government to settle the case and avoid court scrutiny. She also asked whether Trump and the Justice Department were truly adversarial parties, given that the president effectively controls both sides of the dispute.
"The purported settlement that was publicly disclosed after this court dismissed this matter raises profound questions about the parties' candor toward the court and manipulation of the judicial system," the retired judges wrote in their motion.
The fund has drawn bipartisan criticism. Lawmakers from both parties have called it a slush fund, and observers have suggested it amounts to a scheme for Trump to reward political supporters while indirectly benefiting himself and his family. The fund is not explicitly limited by political affiliation, though critics note it appears designed to compensate Trump supporters convicted for their actions during the January 6 Capitol riot.
The settlement emerged after Todd Blanche, Trump's former personal attorney now serving as acting attorney general, announced the deal. Williams questioned the legitimacy of the "forever" protection granted to the Trump family, noting that Blanche alone signed the provision shielding them from IRS audits.
An inquiry into the settlement could bring Justice Department officials, including Blanche, before Williams' court to testify about the deal's terms and beneficiaries.
The leak of Trump's tax returns revealed he paid little or no federal income tax over several years, despite earning millions from his reality television show "The Apprentice." Charles Littlejohn, a former employee of the IRS contractor Booz Allen Hamilton, was sentenced to five years in prison in 2024 after his conviction on charges related to the leak.
Even critics of Trump have announced plans to seek compensation from the fund. Former Trump attorney Michael Cohen, now an outspoken opponent, said he would apply for restitution based on financial and personal persecution he claims to have suffered.
A separate federal judge in Virginia has already issued a temporary block on the fund's establishment and any disbursements, keeping the matter in legal limbo as various challenges proceed.
Author James Rodriguez: "Williams is asking exactly the right questions, and if the answers confirm what these retired judges suspect, this settlement could unravel under judicial scrutiny."
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