This Federal Judge Just Destroyed Trump's Settlement With the IRS

A federal court on Monday voided President Donald Trump’s lawsuit against the IRS and referred one of his lawyers for possible disciplinary action.

U.S. District Judge for the Southern District of Florida Kathleen M. Williams found that the lawsuit never presented a real “case or controversy” because, as the president, Trump essentially controlled the defendant agencies and their lawyers. This means there was no true contention in his case.

She further argued that the lawsuit was filed for the wrong purpose: “to gain the imprimatur of judicial legitimacy for a ‘settlement’ that had no viable basis in law or fact.”

In his complaint, Trump and others alleged that the IRS and Treasury Department caused them “reputational and financial harm” by failing to stop contractor Charles Littlejohn from unlawfully leaking his tax return documentation to news outlets like the New York Times and ProPublica.

Trump and his team demanded at least $10 billion in damages. His lawyers tried to frame the lawsuit as a normal one, noting that while he is a sitting president, he “brings this suit in his personal capacity” and insisted there was nothing unusual about the case or the settlement.

The ruling from U.S. District Judge Kathleen Williams amounts to a stinging rebuke of the Republican president’s lawsuit, characterizing it as an exercise in self-dealing in which he sued an entity that is effectively under his control. https://t.co/jOcMKryEfQ
— Blue Crew 💙🌊 (@VotesBlue2) July 13, 2026

The Justice Department never filed an appearance or substantive response to Trump’s allegations in court. Instead, it joined in negotiating and announcing a settlement that involved a formal apology and the creation of the $1.776 billion “Anti-Weaponization Fund” aimed at compensating those who were targets of government lawfare.

Acting Attorney General Todd Blanche told Congress there was “no judge” and “no mechanism” for reviewing the settlement because Trump had already voluntarily dismissed his case against the IRS and Treasury Department. He also pointed out that the White House already scrapped the Anti-Weaponization Fund.