Judge voids Trump's $1.8 billion IRS settlement, calling the lawsuit collusion
US District Judge Kathleen Williams voided the settlement of President Trump’s lawsuit against the Internal Revenue Service, finding that the arrangement was a product of “collusion” between executive branch agencies designed to secure benefits for Trump. Trump had sued his own administration in January over the leak of his tax returns; the parties then reached a deal that would have created a roughly $1.8 billion “anti-weaponization” fund to pay people who claim the government wronged them, while barring any further action tied to his past tax returns — a shield extended to his family and businesses.
Williams held that the plaintiffs “improperly employed this lawsuit” to obtain access to taxpayer funds and exemption from audits, accomplished “by leveraging control over” the government defendants who were nominally on the other side. Because the same executive branch controlled both sides, there was no genuine adversarial dispute for the court to resolve. The judge referred a Trump attorney to the Florida Bar and directed that her order be added to disciplinary proceedings already underway against Acting Attorney General Todd Blanche and Associate Attorney General Stanley Woodward.
The ruling removes, for now, a mechanism that would have used public money and a court’s imprimatur to place the president’s tax history beyond review. The government can appeal, but the finding of collusion and the referrals raise the legal stakes for the officials who negotiated the deal.