US President Donald Trump has appealed a federal judge’s ruling that questioned the legality of his $10 billion lawsuit against the (IRS), according to court filings reported by NBC News.
The notice of appeal, filed on Friday in the US District Court in Miami, challenges a July 13 order by US District Judge Kathleen Williams, who said the lawsuit had been filed for an “improper purpose” and was aimed at providing judicial legitimacy to a settlement that lacked a legal basis.
The lawsuit, brought by Trump, his sons and Eric Trump, the Trump Organization and their attorneys, stemmed from the leak of Trump’s tax records by a former IRS contractor. The contractor pleaded guilty in 2023 to stealing and leaking Trump’s tax records and those of thousands of other taxpayers in 2019 and 2020. He is currently serving a five-year prison sentence, according to NBC News.
Why did Trump sue the IRS?
Trump sued the IRS and the US Treasury Department in January, alleging the agency was responsible for the unauthorised disclosure of his tax records, which were later cited in a New York Times report stating that he paid just $750 in federal income taxes in 2016 and 2017.
A spokesperson for Trump’s legal team said on Friday that the IRS had “wrongly allowed a rogue, politically-motivated employee to leak private and confidential information” about Trump, his family and the Trump Organization, according to NBC News.
Following Friday’s appeal, the spokesperson reiterated that “President Trump continues to hold those who wrong America and Americans accountable,” CNBC reported.
Why did the judge criticise the lawsuit?
In her July 13 ruling, Judge Williams concluded that the lawsuit was not filed to “vindicate rights” but rather to “manipulate the judicial process”.
According to CNBC, Williams wrote that the case was used to obtain “judicial legitimacy” for a settlement that granted benefits with “no viable basis in law or fact”.
The judge also noted that Trump, as president, exercises authority over the Justice Department, Treasury Department and the IRS, raising concerns about the circumstances surrounding the settlement.
What was in the settlement?
The lawsuit was withdrawn after the Justice Department agreed to create a $1.776 billion (or roughly $1.8 billion) “anti-weaponization” or “lawfare” fund, intended to compensate people claiming they had been victims of government abuse.
The settlement also reportedly included an agreement preventing the government from pursuing pending tax claims against Trump, his family members and related companies. It barred IRS enforcement actions involving past federal tax returns of Trump, his family and associated entities.
Judge Williams ruled that the Justice Department could not portray the agreement as a judicially approved settlement.
Sanctions and political fallout
Williams imposed several non-monetary sanctions.
NBC News reported that the judge sanctioned acting Attorney General Todd Blanche and Associate Attorney General Stanley Woodward, while asking the Florida Bar to consider disciplinary action against Trump’s attorney Alejandro Brito.
Williams also referred Brito to the Florida Bar, barred attorney Daniel Epstein from appearing in the Southern District of Florida federal court for one year and prohibited Trump and the other parties from describing the agreement as evidence of a court-approved settlement.
The controversy has also affected Blanche’s nomination for US attorney general.
According to reports, Republican Senators John Cornyn of Texas and Thom Tillis of North Carolina have withheld support for Blanche’s confirmation unless the Justice Department permanently shuts down the “anti-weaponization” fund and narrows the tax-related protections contained in the agreement.
Trump says fund is dead
Speaking at Camp David on Friday, Trump acknowledged that the fund would not go ahead.
“The fund is dead, but, you know, I wish it weren’t,” he said, according to CNBC, arguing that people he believes were unfairly targeted by the government deserved compensation.
In a Truth Social post earlier in the day, Trump defended the proposed fund, saying those he described as victims of government abuse “should be paid back for what they were forced to endure”.
The Justice Department has defended the settlement, with a spokesperson previously saying there was “no collusion” in the case and accusing Judge Williams of disregarding legal precedent.
