A federal judge delivered a scathing rebuke Monday to the attorneys who engineered President Trump's contentious settlement with the IRS, accusing them of weaponizing the courts to legitimize audit immunity and a nearly $1.8 billion fund that had sparked bipartisan outrage.
U.S. District Judge Kathleen Williams issued sanctions against the lawyers involved, finding that the underlying lawsuit was never a genuine legal dispute but rather a pretext to use judicial authority as political cover. The case, she wrote, represented an improper 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."
Williams referred one attorney, Daniel Epstein, to the Florida Bar and sent her order to disciplinary authorities in New York and Washington, D.C., specifically naming Acting Attorney General Todd Blanche and Associate Attorney General Stanley Woodward Jr. as recipients. Epstein also faces a one-year ban from practicing in the Southern District of Florida. The judge further barred Trump and the government from describing the deal to end the lawsuit as a "settlement."
The underlying facts traced back to January, when Trump, his two eldest sons, and the Trump Organization sued the IRS and Treasury over a 2019 leak of his tax returns by an IRS contractor. The suit was dropped in May. The Department of Justice then announced the nearly $1.8 billion anti-weaponization fund, issued a formal apology, and promised the IRS would not audit Trump.
The scale of the fund and the audit immunity ignited alarm across both parties. The controversy deepened when 35 former federal judges publicly stated the deal was based on deception, prompting Williams to reopen the case to examine potential sanctions.
Trump's attorneys had argued the judge lost jurisdiction once the lawsuit was dropped. Williams rejected the argument, holding that courts retain power over "collateral" matters such as sanctions even after a case concludes. Allowing parties to escape accountability simply by withdrawing a suit, she reasoned, would enable systemic abuse of the judicial system.
The administration abandoned the $1.8 billion fund in June under bipartisan pressure, but the audit immunity provision remains active, insulating Trump from IRS scrutiny going forward.
The White House declined to comment beyond referring inquiries to Trump's personal legal team. Trump's lawyers and the Trump Organization did not respond to requests for reaction.
Author James Rodriguez: "This order exposes the cynical use of federal courts as a legitimacy launderer, and the bar referrals signal judges won't tolerate it."
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