Judge: Trump sought to 'manipulate the judicial process' with his IRS lawsuit and attempted $1.8B fund
Source: CNN
A federal judge Monday said a controversial lawsuit brought by President Donald Trump against the IRS sought to manipulate the judicial process and that he acted in bad faith in bringing it.
US District Judge Kathleen Williams is ordering sanctions for the attorneys involved in the lawsuit, which led to an attempt to create the now-defunct $1.8 billion anti-weaponization fund for allies of the president. It was also used to justify a Trump administration order giving Trump and his businesses amnesty for any past tax issues.
Williams 56-page opinion blasted the behavior of both the Justice Department arguing that the administrations response to the case disregarded DOJ policies and potentially the law and of the private attorneys who brought the lawsuit on Trumps behalf.
The nature of the suit itself and the conduct of the Parties and counsel from its filing make plain that this was 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 judge wrote.
She ordered that her opinion be submitted to attorney disciplinary boards in in New York and Washington, DC, that are currently reviewing pre-existing professional ethics complaints against acting Attorney General Todd Blanche and Associate Attorney General Stanley Woodward.
Read more: https://www.cnn.com/2026/07/13/politics/trump-irs-judge-ruling-settlement-sanctions

LetMyPeopleVote
(185,040 posts)This opinion will be fun reading
Link to tweet
Judge orders sanctions and possible bar discipline against Trump's lawyers in lawsuit


LetMyPeopleVote
(185,040 posts)The recommendation for attorney discipline made me smile
A federal judge said Trumpâs IRS lawsuit over leaked tax returns was for an âimproper purposeâ and referred his attorneys for disciplinary actions. Judge Kathleen Williams characterized it as an exercise in self-dealing in which Trump sued an entity he controls.
— Tim OâBrien (@timobrien.bsky.social) 2026-07-13T16:12:58.716Z
apnews.com/article/trum...
https://apnews.com/article/trump-irs-justice-department-61adebe5de8982eb214b30889ad4f251
The ruling from U.S. District Judge Kathleen Williams amounts to a stinging rebuke of the Republican presidents lawsuit, characterizing it as an exercise in self-dealing in which he sued an entity that is effectively under his control.
The suit concluded in May with a settlement agreement that created a since-abandoned $1.776 billion fund meant to compensate allies of the president, as well as immunity from tax audits.
The nature of the suit itself and the conduct of the Parties and counsel from its filing make plain that this was 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 judge wrote.
Ocelot II
(132,134 posts)ultralite001
(2,922 posts)TIA
mahatmakanejeeves
(71,939 posts)@harrylitman.bsky.social
Follow
Williams makes clear in a footnote that she lacks the power to prevent DOJ and Trump from entering into a private deal, but all that means is that DOJ could try to just do a brazen giveaway of 1.6B to insurrectionists and 100M amnesty to Trump in exchange for nothing. Just raw raid of public money.
12:43 PM · Jul 13, 2026
Williams makes clear in a footnote that she lacks the power to prevent DOJ and Trump from entering into a private deal, but all that means is that DOJ could try to just do a brazen giveaway of 1.6B to insurrectionists and 100M amnesty to Trump in exchange for nothing. Just raw raid of public money.
— Harry Litman (@harrylitman.bsky.social) 2026-07-13T16:43:22.211Z
Martin68
(28,496 posts)sop
(20,255 posts)LetMyPeopleVote
(185,040 posts)Referring Blanche to the bar just before his confirmation hearing makes me smile
Link to tweet
A federal judge NULLIFIES the purported settlement behind Trumps $1.776B slush fund, finding there was never a case or controversy and referring his attorney for possible professional discipline.
Doc https://storage.courtlistener.com/recap/gov.uscourts.flsd.706172/gov.uscourts.flsd.706172.106.0.pdf



BaronChocula
(5,098 posts)You can skip to 1:15 for the point of the clip. It's about people who get away with it.
ColoringFool
(1,625 posts)BaronChocula
(5,098 posts)So yeah. I bought the DVD many years ago.
LetMyPeopleVote
(185,040 posts)If the president was waiting for a payout from his IRS lawsuit, a federal judge suggested he might need to start lowering his expectations.
Judge questions whether Trump can sue his own administration for billion
— Mike Walker (@newnarrative.bsky.social) 2026-04-27T19:11:24.754Z
www.ms.now/rachel-maddo...
https://www.ms.now/rachel-maddow-show/maddowblog/judge-questions-whether-trump-can-sue-his-own-administration-for-10-billion
A federal judge suggested late last week that the president might have to lower his expectations. Politico reported:
President Donald Trumps $10 billion lawsuit against the IRS over the leaking of his tax returns ran into turbulence Friday as a judge ordered a hearing on whether the Constitution allows the president to sue the federal government he oversees.
U.S. District Court Judge Kathleen Williams has asked Trumps private attorneys and Justice Department lawyers representing the IRS to address whether his control over the governments actions in the case means its the kind of dispute federal courts cannot consider.
Although President Trump avers that he is bringing this lawsuit in his personal capacity, he is the sitting president and his named adversaries are entities whose decisions are subject to his direction, Williams wrote in a four-page order.
It is unclear to this Court whether the Parties are sufficiently adverse to each other so as to satisfy Article IIIs case or controversy requirement, the judge added, referring to the Constitution.....
Shortly after his lawyers filed the case, the president told reporters that he assumed nobody would care if he received a lucrative payout as part of the frivolous litigation. That payout now appears in doubt. Watch this space.
We spent maybe part of one Constitutional law class on the case or controversy provision of the Constitution. This usually came up in the cases dealing with advisory opinions. Here is the relevant part of the US Constitution
The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;to all Cases affecting Ambassadors, other public Ministers and Consuls;to all Cases of admiralty and maritime Jurisdiction; to Controversies to which the United States shall be a Party;to Controversies between two or more States; between a State and Citizens of another State, between Citizens of different States,between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.
Since trump is on both sides of this silly lawsuit, there is no Case or Controversy. This opinion made me smile. I suspect that future Con law classes will be spending more time on this provision of the US Constitution.
Martin68
(28,496 posts)Bayard
(30,960 posts)How far will this be appealed now?
ShazzieB
(23,175 posts)Whatever do you mean!
J/K, obviously!
This is an excellent decision, and I applaud it!
Especially this part:
Here's hoping they both lose their licenses to practice law!
ColoringFool
(1,625 posts)70sEraVet
(5,828 posts)FakeNoose
(43,538 posts)... OR ... he wins, and takes the money from Uncle Sam. Sound about right?
This Judge Kathleen Williams is finally putting Chump's lawsuit in the correct light. Namely - it's all a scam.
ultralite001
(2,922 posts)Appreciated this section (p 33-34)
The gravamen of the settlement agreement is to fund claims premised on events including those arising from, inter alia, the Mar-a-Lago Documents Case and the events of January 6, 2021.46 Indeed, these two cases have been referenced as quintessential Anti-Weaponization and Lawfare claims.47 Instead of either recusing48 because of their previous representations or vigorously defending this lawsuit as required to do so by DOJ
policies and procedures,49 these lawyers agreed to a settlement involving a staggering amount of money potentially benefitting former clients.
Moreover, the Release Order, signed only by Acting Attorney General Blanche, extends a blanket grant of immunity to all Plaintiffs and their families and affiliates, and precludes all current or possible investigations or actions before any other agencies or departments.50 The Release Order also purports to bar the IRS from conducting any future tax audits of President Trump, his sons, and their entities.51 This provision directly contravenes 26 U.S.C. § 7217, titled Prohibition on executive branch influence over taxpayer audits and other investigations, which states:
It shall be unlawful for any applicable person to request, directly or indirectly, any officer or employee of the Internal Revenue Service to conduct or terminate an audit or other investigation of any particular taxpayer with respect to the tax liability of such taxpayer.
LetMyPeopleVote
(185,040 posts)The president probably thought his $10 billion case against the IRS was over. That was before a federal court found his lawyers acted in bad faith.
A federal judge set out to investigate âgrievous allegationsâ in the Trump-IRS case.
— Steve Benen (@stevebenen.com) 2026-07-13T17:37:12.625Z
She apparently did not like what she discovered, concluding that Trump and his lawyers acted âin bad faithâ and filed a civil suit âfor an improper purpose.â
www.ms.now/rachel-maddo...
https://www.ms.now/rachel-maddow-show/maddowblog/trump-irs-settlement-sanctions-lawyers-leaked-tax-returns
A federal judge said Monday that President Donald Trumps lawsuit against the IRS over his leaked tax returns was filed for an improper purpose as she referred attorneys for disciplinary actions.
The ruling from U.S. District Judge Kathleen Williams amounts to a stinging rebuke of the Republican presidents lawsuit, characterizing it as an exercise in self-dealing in which he sued an entity that is effectively under his control.
.....More than a month later, she apparently did not like what she discovered, concluding that Trump and his lawyers acted in bad faith and filed a civil suit for an improper purpose.
The nature of the suit itself and the conduct of the Parties and counsel from its filing make plain that this was 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, Williams wrote.
The judge also prohibited the parties from even referring to it as a settlement.
Just as notably, as CNBC reported, Williams referred Trumps lawyer in the lawsuit, Alejandro Brito, to the Florida bar for consideration on whether Brito should be disciplined in light of the findings in the new order. The judge also ordered that a copy of her ruling be mailed to the State Bar of New York, of which Acting Attorney General Todd Blanche is a member, as well as to the District of Columbia Bar, of which Associate Attorney General Stanley Woodward is a member.
I am looking forward to Blanche's confirmation hearing. One of the questions may be to find out if a disbarred attorney can be Attorney General
mdbl
(9,179 posts)I hope she is safe and protected. It's hard to find a judge who actually uses the law in her decisions.
Yo_Mama_Been_Loggin
(139,582 posts)DrFunkenstein
(8,982 posts)It slipped his mind that it was going to drain into his pocket.
Lasher
(29,771 posts)A US judge has voided a legal agreement between President Donald Trump and federal agencies that granted him immunity from tax audits and allowed his administration to create a since-abandoned $1.8bn (£1.3bn) "anti-weaponisation" fund.
The fund, intended to compensate individuals claiming they were unfairly targeted by the government, was unveiled in May in exchange for Trump dropping his personal $10bn lawsuit against the Internal Revenue Service (IRS).
But on Monday, US District Judge Kathleen Williams said the suit was filed for an improper purpose.
She also referred a Trump lawyer to state authorities to determine whether ethics rules were violated and disciplinary action required.
https://www.bbc.com/news/articles/cn8q0e8d4ego
yellow dahlia
(7,100 posts)LetMyPeopleVote
(185,040 posts)This lawsuit was not brought to vindicate rights, U.S. District Court Judge Kathleen Williams wrote, adding, It was brought to manipulate the judicial process to pursue benefits unavailable in litigation.
NEW: @hayesbrown.bsky.social for @ms.now: The courts wonât give cover to Trumpâs IRS self-dealing
— MS NOW Public Relations (@msnowcomms.bsky.social) 2026-07-14T17:10:45.752Z
Read more â¬ï¸
www.ms.now/opinion/trum...
https://www.ms.now/opinion/trump-irs-slush-fund-judge-ruling
Instead, as Williams noted in her 56-page order, Trump effectively controlled both sides of the lawsuit at all points, rendering it ineligible for relief from the court system.
The settlement, which authorized a $1.776 billion slush fund and granted amnesty to the president and his family from IRS audits, including any that may have already begun on tax returns for last year, was already the most likely outcome before a single brief had been filed from the defendants. In her total rejection of the case, Williams has rightly refused to allow Americas courts to be a fig leaf for Trump to enrich himself and his allies......
As Williams noted:
Whether Executive Branch actors can privately agree to give themselves and their former clients blanket immunities and billions of dollars in tax monies for legally undefined grievances was never an issue advanced to this Court. The question is whether the Parties could do so by claiming to be adverse and engaging the legitimacy of a court proceeding. The answer is a resounding no: the Lead Plaintiff and the Government are one, a fully realized unitary interest.[/blockquote]
Williams did order sanctions against the lawyers who filed the suit on Trumps behalf. That included banning all parties from referring to the settlement as legitimate in any future legal proceeding. She also ordered copies of her decision to the bar associations in New York and the District of Columbia, where Blanche and Associate Attorney General Stanley Woodward who also signed off on the settlement are respectively facing disciplinary hearings regarding unrelated complaints.
Williams provided a forceful declaration that sham lawsuits have no place in the court system, especially those that would benefit the president directly. It is a shame though that Williams superiors at the Supreme Court have all but ruled out any sort of consequences for this malfeasance reaching Trump. Under any reasonable legal system, the person who stood most to benefit from this fraud of a lawsuit should be able to be held accountable. Instead, we live in the world of inherent presidential immunity, even in instances he had hoped to order the government he runs to deposit billions in his bank account.