A federal judge in Florida has found that President Donald Trump's lawsuit against the IRS was orchestrated in bad faith, leveling serious accusations that the case was designed to manipulate the courts rather than resolve any genuine dispute. U.S. District Judge Kathleen Williams issued sanctions against multiple people involved in the litigation, including top Justice Department officials.
Williams rejected arguments that Trump and his legal team were ordinary parties to a lawsuit. She emphasized that as president, Trump holds direct authority over the Justice Department, Treasury Department, and the IRS itself, making the adversarial framing of the case fundamentally dishonest. "After a review of the record, and the Parties' statements, the Court declines to adopt or accept the credulous exercise of divorcing President Trump's current job title from an understanding of what happened here," Williams wrote in her order.
The judge concluded the lawsuit was really "an attempt to use the Court to provide some legitimacy to an agreement to confer immunity to people and entities affiliated with the President," while committing billions in taxpayer dollars. She noted that the facts showed "there was never adverseness between the Parties, there was never a case or controversy, and there was never a question as to who would prevail."
Williams took particular aim at a settlement agreement that would shield Trump and his family from future IRS audits and investigations. The judge highlighted how the numerical amount itself, $1.776 billion, appeared chosen for symbolic reasons rather than based on actual damages calculations. "Even the Fund amount speaks of a 'branding' effort rather than a deliberate and thoughtful calculation of damages," she wrote.
The judge noted that the Justice Department could have mounted a straightforward legal defense. Federal law gives agencies a weapon in such cases: Trump had waited too long to file his claim, exceeding the statute of limitations. Instead of using that defense, the DOJ agreed to strike a deal with Trump's team.
Sanctions Target Top Officials
Williams ordered sanctions against acting Attorney General Todd Blanche and Associate Attorney General Stanley Woodward. She directed that copies of her findings be sent to the New York and Washington D.C. bar associations, where disciplinary proceedings are already underway against both men for alleged ethical violations.
She also referred one of Trump's attorneys, Alejandro Brito, to the Florida bar association for review and potential disciplinary action based on the judge's findings. Daniel Z. Epstein, a lawyer representing America First Legal who was involved in negotiations, has been barred from filing any new cases in the Southern District of Florida for one year.
A spokesperson for Trump's legal team responded by attacking the IRS leak that prompted the original lawsuit. "The IRS wrongly allowed a rogue, politically-motivated employee to leak private and confidential information about President Trump, his family, and the Trump Organization to the New York Times, ProPublica and other left-wing news outlets, which was then illegally released to millions of people. President Trump continues to hold those who wrong America and Americans accountable."
The Treasury Department and Justice Department did not respond to requests for comment.
Trump had sued the IRS and Treasury seeking $10 billion after a former IRS subcontractor leaked his tax returns and those of his sons and his company to news organizations. His attorneys abruptly withdrew the case just two days before they were scheduled to file a brief explaining why the lawsuit was legally proper. That move came immediately after Blanche announced a settlement establishing an "anti-weaponization fund" and granting Trump family members immunity from future audits and investigations.
Blanche later claimed both sides had agreed to scrap the anti-weaponization fund itself, but he has refused congressional demands that he put that statement in writing. He has also declined to make a similar formal statement about the audit immunity provision. Both issues are expected to come up during his confirmation hearing before the Senate.
Williams' order prohibits Trump, his company, and anyone associated with him from citing the settlement agreement in any judicial, administrative, regulatory, arbitration, or official proceeding. The government is similarly blocked from portraying the deals as part of any court-approved settlement.
Author Sarah Mitchell: "A federal judge just called the Trump administration's approach to the IRS lawsuit a manipulation scheme, not a lawsuit, and that verdict carries real weight for officials now facing bar discipline."
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