July 14, 2026 - Miami – On Monday, a federal judge issued a new order in Trump v. IRS – a case in U.S. District Court in Florida where 
President Trump sought to pocket “at least” $10 billion from the U.S. Treasury, but instead “settled” for the creation of a $1.776 billion so-called “Anti-Weaponization Fund” to compensate his political allies and broad immunity for himself, his family, businesses, and associates from federal tax audits and any other federal investigations or liability for any wrongdoing before May 18, 2026. In the striking order, U.S. District Judge Kathleen Williams determined that the case and settlement it produced were “the product of collusion.”
Acting AG Todd Blanche
“The facts before this Court demonstrate 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,” reads the decision. “The Court expressly finds that Plaintiffs acted in bad faith.”
On January 29, 2026, President Trump sued the Treasury Department and the Internal Revenue Service – both agencies he oversees – for $10 billion in taxpayers’ money. In the lawsuit, President Trump, his sons Donald Jr. and Eric, and their family business, the Trump Organization, sought damages for Trump’s personal tax information being leaked to the press by a third-party contractor more than five years earlier. Instead of litigating the case, on May 18, 2026, the Trump family and government announced a “settlement agreement,” in which the case would be dropped in exchange for an apology and the U.S. Department of Justice’s (DOJ’s) agreement that the Attorney General (AG) would issue an order establishing a $1.776 billion “Anti-Weaponization Fund,” which has since been blocked. The next day, Acting AG Blanche issued an order that shields the president, his family, their businesses, and an undefined universe of affiliates from any federal tax audit or investigation or liability for any claims the federal government may have had as of May 18, 2026.
A coalition of four former government officials with combined decades of experience in federal tax law and two public interest organizations, Common Cause and Project on Government Oversight, submitted two friend-of-the-court briefs in the matter, represented by Democracy Forward and Gelber Schachter & Greenberg, P.A.. The four former officials behind the brief included John Koskinen, who served as the 48th Commissioner of the Internal Revenue Service; Kathryn Keneally, who served as the Assistant Attorney General for the U.S. Department of Justice’s Tax Division; Nina Olson, who served as the National Taxpayer Advocate from 2001 to 2019; and Gilbert Rothenberg, who served as the Chief of the U.S. Department of Justice, Tax Division, Appellate Section from 2004 to 2019.
The first friend-of-the-court brief addressed the lack of adverseness between the parties and the weaknesses in Plaintiffs’ claims. The second friend-of-the-court brief addressed the legal flaws in the order issued on May 19, 2026 by acting AG Blanche, which grants President Trump, his family, their businesses, and an undefined universe of affiliates immunity from tax audits, tax liability, and any potentially unlawful non-tax conduct.
Today’s decision acknowledged the points made in both friend-of-the-court briefs, including that there was never adverseness in this case, and that the Immunity Order violates a federal law that prevents the president or his advisors from ordering the IRS to terminate a tax audit. The decision also acknowledges that the settlement deviated from DOJ procedures, and that the Immunity Order’s conferral of potentially millions of dollars in tax relief and other benefits violates the Emolument Clause. The decision acknowledged 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.”
“This is a major win for the American people. President Trump used this sham suit to fleece taxpayers and pocket public money. Democracy Forward was honored to represent a coalition of former government officials and public interest organizations to aid in the court’s consideration and ultimate determination that the lawsuit was effectively a scam,” said Skye Perryman, President and CEO of Democracy Forward. “On behalf of our clients in other litigation, we will continue to challenge the illegal slush fund the president attempted to create and that we secured a court order blocking in the Eastern District of Virginia.”
In today’s decision, the court further found that monetary sanctions against Plaintiffs are appropriate, which the court can impose when parties abuse the judicial process, and additionally ordered Plaintiffs’ attorneys to the Florida bar for disciplinary proceedings, as well as for a copy of the order be mailed to New York State Bar (where Acting AG Blanche is barred) and the District of Columbia Bar (where Associate AG Woodward is barred).
Trump v. IRS is not the first time that the president has sought direct personal payment from the federal government. On December 15, 2025, Democracy Forward filed a lawsuit after the U.S. Departments of Justice and the Treasury refused to release any records related to President Trump’s stunning effort to obtain a $230 million taxpayer-funded payout for investigations into his own misconduct — and the compromised process reportedly underway inside the DOJ to evaluate his demands.
Democracy Forward’s legal team involved in this matter includes Ayesha Khan, Jyoti Jasrasaria, Pooja Boisture, Tsuki Hoshijima, Cynthia Liao, and Lisa Newman. The legal team at Gelber Schachter & Greenberg, P.A. includes Gerald E. Greenberg and Daniel Walsh.
Read today’s decision here and the friend-of-the-court briefs in Trump v. IRS here and here.
Democracy Forward Foundation is a national legal organization that advances democracy and social progress through litigation, policy, public education, and regulatory engagement. For more information, please visit www.democracyforward.org.
Source: Democracy Forward Foundation
