A federal judge on Monday ruled that President Trump’s $10 billion lawsuit against the IRS over the illegal release of his personal tax records was an improper attempt to manipulate the legal process to his own advantage.
The lawsuit was never formally litigated and instead resulted in a highly unusual agreement between Trump and the federal government that purported to create a $1.776 billion “anti-weaponization” fund dedicated to paying off Trump’s allies who had been prosecuted by the federal government, though the effort to create that fund was abandoned by the White House following stiff pushback by Congress.
A separate order signed by Acting Attorney General Todd Blanche bars the IRS from investigating Trump, his family and his businesses. That so-called “settlement agreement” could be worth more than $100 million to Trump, who was embroiled in an ongoing investigation into his tax returns and facing a potentially massive fine, should the IRS have ruled against him.
In a 56-page filing, U.S. District Judge Kathleen Williams said that Trump’s lawsuit against the IRS “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.”
No ‘adverseness’: The judge ruled that the lawsuit brought by Trump against an agency of the government that he controlled lacked true adversity between the parties, a fundamental requirement for legitimate jurisdiction.
Trump, who initiated the suit along with his sons and their family businesses, controlled both the Department of Justice and the IRS. As a result, “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,” Williams wrote. “The Lead Plaintiff and the Government are one, a fully realized unitary interest.”
Williams said the plaintiffs sought billions of dollars but did not explain why they would be entitled to the specific sum. The judge noted that the $1.776 billion dedicated to the “anti-weaponization” fund had no connection to any specific harm, and instead “speaks of a ‘branding’ effort rather than a deliberate and thoughtful calculation of damages.”
Trump’s protection from the IRS: The judge said that since the pledge from the federal government to provide Trump immunity from IRS investigations hadn’t been filed in court, she has no jurisdiction over it. But she did bar Trump and his family from referring to the agreement as a “settlement” in any official proceeding, likely weakening the power of the agreement considerably, if not voiding it entirely.
Trouble for Blanche? The scathing ruling against Trump’s lawsuit will likely come up this week when Blanche is scheduled to appear before the Senate Judiciary Committee for a confirmation hearing on his nomination to be attorney general. Blanche, who was once the president’s personal lawyer and is the sole signatory on the IRS immunity order, was nominated last month by Trump to serve as the chief law enforcement officer of the federal government.
In her ruling, Williams referred one of Trump’s lawyers in the IRS suit, Alejandro Brito, to the Florida Bar for potential disciplinary action for his role in the improper lawsuit and limited the ability of another lawyer, Daniel Epstein, to practice in the Southern District of Florida. She also ordered that a copy of her ruling be sent to the New York State Bar, where Blanche is a member, and to the District of Columbia Bar, where Associate Attorney General Stanley Woodward is a member.