U.S. District Judge Kathleen Williams has ruled that former President Donald Trump’s $10 billion lawsuit against the IRS was filed for an "improper purpose," also referring Trump's attorney to the Florida Bar for potential disciplinary action. The lawsuit, filed after Trump's confidential tax records were leaked in 2019, sought damages from the IRS and Treasury Department for failing to protect his financial information.
Williams, an Obama appointee, found that Trump's legal team was attempting to legitimize a controversial Justice Department settlement through the lawsuit. "The Parties here are not private actors to a mine-run dispute, recounting their proficiency in the art of the deal they negotiated," Williams wrote. "Lead Plaintiff and Defendants are public servants—the pinnacle of the Executive Branch—sworn to uphold the law, faithfully perform the duties of their office, and protect the interests of the American public."
Trump and his two eldest sons had sued the IRS and Treasury Department after IRS contractor Charles Littlejohn pleaded guilty to one count of unauthorized disclosure of tax return and return information. Trump envisioned using funds from the lawsuit settlement to create an "Anti-Weaponization Fund" intended to compensate alleged victims of government "lawfare" and halt IRS audits of his finances.
This proposed fund drew significant criticism from Democrats, who labeled it a "slush fund" for Trump and his associates. Following political backlash, the Justice Department's acting attorney general moved to withdraw that portion of the settlement. The lawsuit has brought renewed attention to the proposed fund as confirmation hearings for Todd Blanche, the acting attorney general, were set to begin.
Williams specifically addressed Blanche's testimony regarding the settlement's review. "The Court is extremely troubled by the testimony given by Acting Attorney General Blanche on May 19, 2026. In response to why the 'settlement agreement' had not been submitted to this Court for review, he stated that 'there is no judge' because the case had been dismissed and, therefore, there was 'no mechanism' for reviewing the agreement," the judge wrote. She characterized his response as "at best, misleading and, at worst, disingenuous."