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A federal judge in Florida has decided to reopen former President Trump’s lawsuit against the IRS, which seeks $10 billion in damages. This decision comes after intervenors raised concerns that a settlement established to create an “anti-weaponization” fund might have compromised the case’s integrity.
The resolution had initially been reached between the Department of Justice (DOJ) and Trump, agreeing to dismiss his lawsuit voluntarily. In return, a $1.776 billion fund was to be created, allowing individuals who feel they have been wronged by the government to claim compensation.
This agreement effectively allowed Trump and the DOJ to bypass U.S. District Judge Kathleen Williams, who was overseeing the case. However, on Friday, Judge Williams decided to revisit the matter.
“The non-party movants explain that although there is no settlement of record in this matter, public documents and announcements indicate that the dismissal of this case was premised on a purported settlement between the Parties,” Judge Williams noted in her decision.
“The non-party movants explain that although there is no settlement of record in this matter, public documents and announcements indicate that the dismissal of this case was premised on a purported settlement between the Parties,” she wrote.
“In turn, movants submit that the settlement ‘is a product of collusion and is itself a fraud on the Court.’”
In reopening the case, Williams largely returns it to where it was before the parties alerted the judge that they would be dismissing the case and starting the fund.
That move set off a firestorm, spawning pushback even from congressional Republicans who have sponsored legislation to ban the fund, asserting Congress gave no authority for such spending.
Democrats have also blasted the fund, saying it will be used to funnel money to Trump’s allies, including those who condone actions like the Jan. 6, 2021, attack on the U.S. Capitol, and otherwise back claims from those who were rightfully prosecuted.
In addition to the fund, acting Attorney General Todd Blanche later signed an addendum to “forever bar and preclude” the IRS from reviewing Trump’s prior tax returns. Previous reports have found Trump could owe as much as $100 million following audits of prior returns.
The filing came from 35 former federal judges who argued the original case violated the conditional requirement for parties to be truly adverse in court suits.
“The non-party movants advance grievous allegations that Plaintiffs voluntarily dismissed this litigation solely to avoid judicial scrutiny of a lawsuit that ‘was collusive from the start’ and was only filed to provide the imprimatur of legality for an unlawful settlement,” Williams wrote.
“They point to the fact that the settlement in question includes a ‘three-paragraph addendum … [that] purports to ‘forever bar and preclude’ the United States from pursuing claims that could have been [otherwise] asserted [against] Plaintiffs,’ and highlight the fact that Defendants did not ‘even try to defend against Plaintiffs’ claims’ despite their active opposition to nearly identical claims in other litigation.”
The order from Williams launches a new inquiry, directing both Trump and the DOJ to again file briefs to explain “charges of collusion and whether the Parties are truly adverse” as well as “whether the case should be reopened because the Court was the ‘victim of a fraud.’”
Updated at 7:22 p.m. EDT.