Federal Judge Voids Trump's $1.8 Billion IRS Settlement, Refers Attorneys for Discipline

Jul 13, 2026

A federal judge voided President Trump's settlement with the IRS, ruling his lawsuit was filed for an "improper purpose." The now-nullified deal granted Trump and his family immunity from past tax audits and created a since-abandoned $1.8B "anti-weaponization" fund. Judge Kathleen Williams referred Trump's lawyers for potential discipline, stating the case lacked a real dispute as Trump controls the agencies he sued.

Settlement voiding by judge

▪Judge Williams ruled that Trump's $10 billion lawsuit against the IRS was filed for an "improper purpose."
▪A spokesperson for Trump's legal team stated the IRS "wrongly allowed a rogue, politically-motivated employee to leak private and confidential information."
▪On July 13, 2026, U.S. District Judge Kathleen Williams voided a settlement between President Donald Trump and the IRS.
▪The judge barred Trump and his administration from using the "purported 'settlement agreement'" as evidence in any future judicial or regulatory proceedings.

Attorney discipline referrals

▪The judge also directed that her order be sent to the state bar associations for Acting Attorney General Todd Blanche and Associate Attorney General Stanley Woodward.
▪Judge Williams referred Alejandro Brito, one of Trump's attorneys, to the Florida bar for potential disciplinary action.

Weaponization fund controversy

▪The plan for the "anti-weaponization" fund was abandoned in early June 2026 following public backlash and a separate lawsuit.
▪The settlement had established a since-abandoned $1.8 billion "anti-weaponization" fund to compensate alleged victims of government overreach.
▪The fund drew bipartisan criticism over concerns it could benefit individuals prosecuted for the Jan. 6, 2021, Capitol riot.

IRS audit immunity provisions

▪The leaked tax information formed the basis of a New York Times report that Trump paid $750 in federal income tax in 2016.
▪Trump's original lawsuit claimed the IRS failed to prevent the leak of his private tax information by a former contractor, Charles Littlejohn.
▪The agreement granted Trump, his family, and his businesses immunity from IRS audits, prosecution, or enforcement action for tax returns filed before May 2026.

Fraud on court allegations

▪The judge described the lawsuit as an attempt to "use the Court to provide some legitimacy" to the agreement.
▪The judge's inquiry into the settlement followed a court brief filed by 35 former judges who accused the parties of perpetuating a "fraud on the court."
▪Judge Williams found there was "never adverseness between the Parties" as Trump, being president, controls the defendant agencies, the DOJ and IRS.