US District Judge Kathleen Williams on July 13, 2026, voided a $1.8 billion settlement agreement between President Donald Trump and the IRS that granted him and related entities immunity from tax audits and created a since-abandoned anti-weaponization fund [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11].
The settlement had been reached in May 2026 in exchange for Trump dropping a $10 billion lawsuit he and his family filed against the IRS over the leak of his private tax records by a former IRS contractor [1, 3, 4, 5, 8, 9, 10, 11]. The contractor, Charles Littlejohn, had leaked the tax returns in 2019 before the 2020 election and was later indicted in 2023 and sentenced to five years in prison in 2024 [1, 10, 11].
Judge Williams ruled the lawsuit was filed for an improper purpose, describing it as "an attempt to manipulate the judicial process and confer immunity to people and entities affiliated with the President." She said, "This action was never about a party seeking judicial resolution of a legal issue or a factual dispute. This was an attempt to use the Court to provide some legitimacy to an agreement to confer immunity... and to earmark billions of dollars from American taxpayers to redress grievances not defined in the law" [2, 3].
The judge also found that Trump and the IRS, which he controls as president, were not genuinely opposing parties as required under the US Constitution, stating, "The Lead Plaintiff and the Government are one, a fully realized unitary interest" [1, 2, 3, 4, 7, 8, 9, 10].
The settlement had included an anti-weaponization fund of about $1.776 billion intended to compensate individuals claiming unfair government investigations. That fund was abandoned after bipartisan criticism in June 2026 [1, 2, 3, 4, 5, 6, 7, 9, 10, 11].
The ruling bars Trump, his sons, the Trump Organization, and certain government officials from citing the voided settlement or its terms in future legal or administrative proceedings [1, 5, 7, 8, 9, 10, 11].
Trump’s lawyers Alejandro Brito and Daniel Epstein face disciplinary actions. Brito was referred to the Florida Bar, while Epstein was banned for at least one year from practicing in the Southern District of Florida [1, 5, 6, 7, 8, 9, 10, 11]. The court also sent its order to the New York and Washington, DC Bar associations for possible action against DOJ officials, including Acting Attorney General Todd Blanche and Associate Attorney General Stanley Woodward [1, 4, 5, 6, 7, 8, 9, 10, 11].
Judge Williams further criticized the Department of Justice for abandoning its duty to defend the public interest and for exceeding its legal authority in pursuing the settlement [4, 6, 10, 11]. In response, Trump’s legal team denied wrongdoing, saying, "The president continues to hold those who wrong America and Americans accountable" [7, 10, 11].
The legal battle traces back to the 2019 IRS leak by contractor Charles Littlejohn and continues with the recent voiding of the settlement and sanctions against lawyers today.
