In a scathing order Monday, a federal judge in Florida said President Donald Trump filed a $10 billion lawsuit against the Internal Revenue Service for “improper purposes” and a show of “judicial vindication” for his controversial settlement with the Justice Department.
The May settlement temporarily led the Justice Department to create a since-abandoned $1.8 billion “legal” fund to compensate alleged victims of the department’s prosecutorial overreach.
It also effectively provided Mr. Trump, his family, and related entities with immunity from IRS audits, prosecutions, and regulatory enforcement actions on tax returns filed through the May settlement date.
In a new order in U.S. District Court in Miami, Judge Kathleen Williams said that because of Trump’s control of the Justice Department and the Internal Revenue Service, “there was never any prejudice between the parties, there was never any litigation or controversy, and there was never a question of who would win.”
“This case was never about parties seeking judicial resolution of legal issues or factual disputes,” Williams wrote.
“The nature of the lawsuit itself and the conduct of the parties and their attorneys in filing the lawsuit make it clear that this is an attempt to use the courts to confer immunity to persons and entities associated with the President and to lend some legitimacy to an agreement that allocates billions of American taxpayer dollars to redress grievances not covered by law,” the judge wrote.
In his order, Williams referred Trump’s lawyer in the case, Alejandro Brito, to the Florida Bar to consider whether to pursue disciplinary action based on Brito’s findings.
Mr. Williams then ordered that copies of the order be sent to the New York State Bar Association, which includes Acting Attorney General Todd Blanche, and the District of Columbia Bar Association, which includes Deputy Attorney General Stanley Woodward.
Blanche, Trump’s former criminal defense attorney, was responsible for signing the settlement with Trump on behalf of the Internal Revenue Service, which the president was suing over leaks of his tax records by an agency contractor.
President Trump nominated Branch to be attorney general. The Senate Judiciary Committee is scheduled to hold hearings on Blanche’s nomination on Wednesday and Thursday.
Williams barred Trump, the Justice Department and other litigants from using “purported ‘settlement agreements'” as evidence of settlements in judicial or other proceedings.
Williams’ order suggests that Trump will no longer be protected from IRS enforcement actions related to previously filed returns. The IRS is unlikely to take such action while Trump is still president. His term ends in January 2029.
The order also suggests the Justice Department cannot reinstate the $1.8 billion fund. The fund was quickly abandoned after pushback from members of Congress over concerns that it would be used to compensate those who stormed the U.S. Capitol and police during the Jan. 6, 2021, riot by Trump supporters.
A federal judge in Virginia said on June 25 that a lawsuit over the fund could move forward because the Justice Department refused to confirm in writing that the fund had been extinguished.
Williams’ order came in response to a brief by 35 former judges asking her to reopen the case, which Trump and the IRS settled before Williams ruled on the question of whether the parties were actually adverse to each other, given Trump’s position as head of the executive branch of the government, which includes the IRS.
“The court’s opinion is a major victory for the rule of law,” lawyers Norm Eisen and Matt Platkin, who represented the judge, said in a statement.
“We are proud to represent these former judges in presenting the arguments adopted by the court,” the attorneys said.
A spokesperson for Trump’s legal team, which includes Brito, said in a statement in response to the order: “The IRS unfairly allowed corrupt, politically motivated employees to leak private and sensitive information about President Trump, his family, and the Trump Organization to the New York Times, ProPublica, and other left-leaning news outlets, which then illegally disclosed it to millions of people.”
“President Trump continues to hold accountable those who have wronged America and Americans,” the spokesperson said.
The White House declined to comment to MS NOW, referring questions to a spokesperson for Trump’s legal team.
CNBC has reached out to the Department of Justice for comment.
