Judge finds Trump’s IRS lawsuit was filed in bad faith and orders sanctions

U.S. District Judge Kathleen Williams issued a 56-page opinion saying the lawsuit filed by former President Donald Trump against the Internal Revenue Service was intended to "manipulate the judicial process" and was brought in bad faith. The judge ordered sanctions against the private lawyers who represented Trump and referred the Justice Department officials who negotiated the settlement to disciplinary boards in New York and Washington, D.C.

Williams said the case was used to lend legitimacy to an agreement that would grant immunity to Trump-affiliated entities and earmark billions of taxpayer dollars for undefined grievances. She noted that the Justice Department abandoned its duty to defend the United States’ interests, entered a settlement that violated department policies, and pursued objectives prohibited by law.

"The nature of the suit itself and the conduct of the Parties and counsel from its filing make plain that this was an attempt to use the Court to provide some legitimacy to an agreement to confer immunity to people and entities affiliated with the President and to earmark billions of dollars from American taxpayers to redress grievances not defined in the law," the judge wrote.

The opinion also directed that one private attorney be referred to the Florida Bar for possible discipline and barred another from appearing in the Southern District of Florida for a year. Williams sent her findings to the attorney-disciplinary boards reviewing existing complaints against Acting Attorney General Todd Blanche and Associate Attorney General Stanley Woodward.

Attorneys representing a group of retired judges, who had asked the court to review the settlement, called the ruling "a resounding victory for the rule of law." The Justice Department has not commented.

A spokesperson for Trump’s legal team claimed the IRS had improperly leaked confidential tax information, but the judge’s order focused on the alleged misuse of the lawsuit and the settlement that created a now-defunct $1.8 billion "anti-weaponization" fund and a tax-amnesty memorandum.

Williams suggested that Blanche and Woodward should have recused themselves because of prior private-practice work that could benefit from the settlement, and she questioned the legality of the tax-amnesty provision, which she said may contravene federal law prohibiting executive influence over tax audits. The judge’s decision comes as Blanche prepares for a Senate Judiciary Committee hearing on his pending confirmation as the permanent head of the Justice Department.