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In a significant move, a federal judge in Florida has decided to revisit former President Donald Trump’s $10 billion lawsuit against the IRS. This decision aligns with intervenors’ claims that a settlement involving an “anti-weaponization” fund has compromised the integrity of the case.
Donald Trump and the Department of Justice (DOJ) had previously reached an agreement to voluntarily drop his lawsuit against the IRS. In return, a $1.776 billion fund was established, intended for individuals who believe they have been wronged by the government, allowing them to seek compensation.
This agreement allowed both Trump and the DOJ to bypass the jurisdiction of U.S. District Judge Kathleen Williams, who was originally overseeing the case.
However, on Friday, Judge Williams decided to reopen the case for further examination.
“The non-party movants assert that, despite the lack of an official settlement record in this case, available public documents and announcements suggest that the case’s dismissal was based on an alleged settlement between the parties involved,” she noted in her statement.
“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.