A Judge Voided the Sham Lawsuit Trump Filed Against His Own IRS to Launder Himself Tax Immunity and a $1.776 Billion "Anti-Weaponization" Slush Fund for His Allies — Finding "Bad Faith," No Real Case, and Referring Acting AG Todd Blanche for Discipline Two Days Before His Confirmation Hearing for the Permanent Job
On July 13, 2026, U.S. District Judge Kathleen Williams (an Obama appointee in the Southern District of Florida) issued a scathing 56-page order voiding the settlement of Trump's lawsuit against the IRS and referring his lawyers — including Acting Attorney General Todd Blanche — for disciplinary action. The backstory: in January, Trump and his two eldest sons sued the IRS for $10 billion over the leak of his tax returns. In May, "both sides" settled — except both sides were Trump. As president he controlled the IRS he was suing. The settlement created a $1.776 billion "anti-weaponization fund" to pay Trump allies (premised on January 6 and classified-documents claims) and, via a memo Blanche signed and quietly added to the DOJ announcement, granted Trump, his family, and his businesses sweeping immunity from IRS audits and other federal claims for past conduct. Nearly three dozen former federal judges from both parties — including Bush appointee J. Michael Luttig — intervened, calling it "the product of collusion" and "a fraud on the court." Williams agreed: "there was never adverseness between the Parties; there was never a case or controversy; and there was never a question as to who would prevail." She found Trump and his sons "acted in bad faith," said the tax-amnesty order "directly contravenes" the federal law barring presidents from influencing audits, and noted the $1.776 billion figure "speaks of a 'branding' effort rather than a deliberate and thoughtful calculation of damages." She was "extremely troubled" by Blanche's congressional testimony, calling one answer "at best, misleading and, at worst, disingenuous." She referred Blanche and Associate AG Stanley Woodward to the New York and D.C. bars (where disciplinary proceedings are already underway), referred private attorney Alejandro Brito to the Florida Bar, limited attorney Daniel Epstein's practice, voided the agreement so it can never be cited in any proceeding, and ordered sanctions. She closed by quoting John Adams: "Facts are stubborn things." The ruling landed two days before Blanche's Senate Judiciary confirmation hearing to become permanent attorney general.