A federal judge in Florida on Monday said that President Donald Trump filed a $10 billion lawsuit against the Internal Revenue Service “for an improper purpose” – to be seen as “court legitimacy” to resolve a dispute with the Department of Justice.
That settlement in May briefly led the DOJ to create a $1.8 billion “judgment” fund that had been left to compensate victims targeted by the prosecutors’ department.
It also resulted in Trump, members of his family and related business entities being granted effective immunity from audits, prosecutions or enforcement actions by the IRS regarding tax returns filed up until the May payment date.
Judge Kathleen Williams, in her new order in US District Court in Miami, said that because Trump controls the DOJ and the IRS, “there has never been a dispute between the Parties; there has never been a lawsuit or a dispute; and there has never been a question of who will win.”
“This action has never been one of a party seeking judicial resolution of an issue of law or factual dispute,” Williams wrote.
“The nature of the lawsuit itself and the behavior of the Parties and the attorneys in filing it make it clear that this was an attempt to use the Court to give some authority to the agreement to grant immunity to individuals and institutions connected to the President and to put billions of dollars on the American taxpayers to settle complaints that are not defined in the law,” the judge wrote.
Williams, per his order, referred Trump’s attorney in the case, Alejandro Brito, to the Florida bar to determine whether Brito should be disciplined for his findings.
And Williams ordered that a copy of the order be sent to the New York State Bar, of which Acting Attorney General Todd Blanche is a member, and to the District of Columbia Bar, of which Associate Attorney General Stanley Woodward is a member.
Blanche, Trump’s former criminal defense attorney, was responsible for signing the agreement with Trump on behalf of the IRS, which the president had accused of leaking his tax records through an agency contract.
Trump nominated Blanche to serve as attorney general. The Senate Judiciary Committee is expected to hold hearings on Blanche’s nomination on Wednesday and Thursday.
Williams has barred Trump, the DOJ and other parties in the case from using the “‘settlement’ agreement” at trial or other proceedings as evidence of the settlement of the case.
Williams’ order suggests Trump no longer has immunity from future IRS enforcement action related to previously filed returns. The IRS is unlikely to take this step while Trump is president. His term ends in January 2029.
The order also states that the DOJ cannot revive its $1.8 billion fund, which was immediately abandoned after being slammed by members of Congress over concerns that it would be used to compensate people who attacked the US Capitol and the police there during the January 6, 2021, violence of Trump supporters.
A federal judge in Virginia on June 25 said the lawsuit against the fund could go forward, saying the DOJ had refused to certify in writing that the fund was dead.
Williams’ order came in response to a statement filed by 35 judges asking him to reopen the case, which Trump and the IRS settled before Williams ruled on the question of whether the parties were actually at odds given Trump’s position as president and head of the executive branch of government, including the IRS.
“The court’s opinion is a stunning victory for the judiciary,” attorneys representing the judges, Norm Eisen and Matt Platkin, said in a statement.
“We are proud to represent these former judges in presenting the reasons accepted by the court,” said the lawyers.
A spokesperson for Trump’s legal team, including Brito, in a statement responding to the order, said, “The IRS improperly allowed a corrupt, politically motivated employee to leak classified and confidential information about President Trump, his family, and the Trump Organization to the New York Times, ProPublica and other left-wing news outlets, which were then illegally released to millions of people.”
“President Trump continues to impeach those who wrong America and Americans,” the spokesman said.
The White House declined to comment to MS NOW, referring questions to a spokesman for Trump’s legal team.
CNBC has requested comment from the DOJ.
