US judge nullifies Trump deal to resolve IRS lawsuit in scathing ruling

A federal judge in the Southern District of Florida on Monday nullified an agreement reached between the government and Donald Trump and his sons over the leak of the president's tax returns. Judge Kathleen Williams harshly criticized both the government and Trump's lawyers for using the judicial process to create a beneficial arrangement for the president.

The settlement, announced earlier this year, resolved a $10bn lawsuit filed by Trump and his sons over the tax return leak. It included a $1.8bn fund for victims of "government weaponization" and granted Trump, his family, and related entities immunity from tax audits. After bipartisan backlash, Acting Attorney General Todd Blanche scrapped the fund, but the tax immunity provisions remained.

In her 56-page ruling, Williams stated that there was never a genuine controversy in the case because Trump controls the Treasury Department. She wrote that the lawsuit was brought for an improper purpose: to gain judicial legitimacy for a settlement with "no viable basis in law or fact." Her ruling blocks both parties from using or citing the settlement in any future proceedings.

Williams pointed to several signs of bad faith. For example, Trump lawyer Daniel Epstein never sought permission to appear in the Southern District of Florida, indicating he never intended to pursue the case. The Justice Department also failed to address whether the agreement violated the Constitution's emoluments clause or a law preventing a president from ordering or ending a taxpayer audit.

Williams referred one of Trump's lawyers, Alejandro Brito, to the Florida Bar for possible disciplinary action and banned Epstein from practicing in the Southern District of Florida for a year. She also criticized Blanche and Associate Attorney General Stanley Woodward and referred them to the bars of New York and the District of Columbia, where they face ongoing disciplinary proceedings.

Williams ordered the parties to pay the legal fees of retired judges and other third parties who filed friend-of-the-court briefs. Blanche is expected to face questions about the settlement during his confirmation hearing to become permanent attorney general on Wednesday. Critics continue to call for congressional action to fully nullify the deal and prevent future attempts at presidential self-dealing.