On Monday, July 14th, 2026, U.S. District Judge Kathleen Williams issued a scathing ruling on President Donald Trump's lawsuit against the IRS filed on January 29th. Judge Williams concluded that the lawsuit was merely a pretext to secure a "settlement agreement" that granted significant favors to Trump, his family, and supporters at the expense of U.S. taxpayers.

Judge Williams stated that the plaintiffs and defendants "worked in tandem and were never actually adverse," and that the case was brought for an improper purpose: "to gain the imprimatur of judicial legitimacy for a 'settlement' that had no viable basis in law or fact." She also ordered sanctions against Trump's lawyers.

The settlement, announced by Acting Attorney General Todd Blanche on May 18th, included $1.8 billion in taxpayer money allocated to an "Anti-Weaponization Fund" intended to benefit Trump's allies. Additionally, the agreement provided protection from liability for tax violations and other federal offenses committed by Trump or his relatives prior to May 19th, potentially saving Trump over $100 million in back taxes, interest, and penalties.

The Anti-Weaponization Fund faced bipartisan criticism, leading Blanche to abandon the plan two weeks after its announcement. Subsequently, on May 29th, Judge Williams ordered Trump's lawyers to respond to "grievous allegations" concerning the arrangement, including "charges of collusion" and claims that the case dismissal was based on deception. She considered whether the case should be reopened due to the court being "the 'victim of a fraud.'"

Trump’s legal order also precluded the Justice Department from opposing his legal positions and asserted that "it shall be the policy of the executive branch to ensure Presidential supervision and control of the entire executive branch." This stance aligns with the Supreme Court's recent position in Trump v. and echoes Trump's 2017 statement to The New York Times asserting his "absolute right to do what I want to do with the Justice Department."

Sources