US judge scraps Trump's IRS settlement deal, says lawsuit sought to 'manipulate judicial process'

A US federal judge on Monday voided President Donald Trump’s settlement with the Internal Revenue Service (IRS), ruled that the lawsuit had been filed for an “improper purpose”, and recommended sanctions and disciplinary action against the lawyers involved.In a 56-page order, US District Judge Kathleen Williams said the lawsuit was not a genuine legal dispute but an attempt to use the courts to legitimise an agreement that granted sweeping benefits to Trump and his allies.“This action was never about a party seeking judicial resolution of a legal issue or a factual dispute,” Williams wrote.She added that the lawsuit 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.”She added. the lawsuit was not a genuine legal dispute but an attempt to “manipulate the judicial process” by using the court to validate an agreement that granted sweeping benefits to Trump and his allies.Williams found that Trump and the IRS, which he oversees as president, were not truly opposing parties as required under the US Constitution. She referred one of Trump’s private lawyers to the Florida Bar for possible disciplinary proceedings and sent her order to disciplinary authorities in New York and Washington, DC, where Acting Attorney General Todd Blanche and Associate Attorney General Stanley Woodward are licensed, to determine whether their conduct violated legal ethics rules.The judge also barred attorney Daniel Epstein, who represented Trump in the case, from appearing before the Southern District of Florida for one year.The lawsuit stemmed from the 2019 leak of Trump’s confidential tax returns by a former IRS contractor. Trump, his sons Donald Trump Jr. and Eric Trump, and the Trump Organization sued the IRS and the Treasury Department, alleging they had failed to protect the family’s tax information.The case ended in May with a settlement that proposed a $1.776 billion “anti-weaponization” fund to compensate alleged victims of politically motivated government actions, along with a formal apology and protection for Trump and his businesses from IRS audits. The fund was later scrapped following bipartisan criticism, though the audit-immunity provision remains in place.Williams also criticised the Justice Department, saying it had “abdicated its responsibility to zealously defend the interests of the United States” by entering into a settlement that “accomplished objectives beyond those authorised, as well as those specifically prohibited, by law.”A spokesperson for Trump’s legal team defended the lawsuit, saying the IRS had allowed “a rogue, politically motivated employee” to leak the president’s confidential tax information and that Trump would continue to hold those responsible accountable.