Judge Reopens Trump's I.R.S. Suit and Questions His 'Weaponization' Fund (New York Times Gift Article)

[LetMyPeopleVote]

The ruling was a blow to both President Trump, who had voluntarily dismissed the suit last week, and to the Justice Department, which used the suit to establish a fund likely intended for Trump allies.

Link to tweet

https://www.nytimes.com/2026/05/29/us/politics/trump-irs-lawsuit-ruling.html?unlocked_article_code=1.mFA.muWo.MFi8gLTfd6Q-&smid=nytcore-ios-share

A federal judge in Miami reopened President Trump’s $10 billion case against the I.R.S. in a striking turnabout, saying that she wanted to investigate “grievous allegations” that the hasty deal to resolve it was “premised on deception.”

The ruling by the judge, Kathleen M. Williams, on Friday to revive the case shortly after closing it was a significant blow both to Mr. Trump, who had voluntarily dismissed the suit last week, and to the Justice Department. After the president withdrew the suit, senior department officials released a pair of extraordinary agreements that settled the case by establishing a $1.8 billion fund to compensate people who claimed they were victims of government “weaponization” by Democrats.

The deal also conferred lucrative tax benefits on Mr. Trump, his family and his businesses.

Judge Williams’s decision came in response to court papers filed on Wednesday by a bipartisan group of 35 former federal judges who urged her to bring the case back to life and dig into the details of the agreement to settle it.....

In her brief but stern order on Friday, Judge Williams said that she wanted to investigate the circumstances surrounding Mr. Trump’s efforts to settle the lawsuit in a way that benefited him and his allies. If she succeeds in moving forward with her inquiry, it could ultimately result in questions being asked of the Justice Department leaders who signed the agreements to settle the suit — chief among them, Todd Blanche, the acting attorney general, and Stanley Woodward Jr., the No. 3 official in the department.

In her order, Judge Williams asserted that she was “empowered to investigate serious misconduct” in any case before her, and ordered Mr. Trump’s lawyers to tell her by June 12 whether the lawsuit should be formally reopened because “the court was the victim of a fraud.”.....

Mr. Trump’s suit, as I.R.S. officials laid out in their memo and other lawyers have noted, had clear legal flaws. Potential defenses against it include that it was filed after the statute of limitations, and that it incorrectly faulted the I.R.S. for the actions of Mr. Littlejohn, previously a contractor employed by Booz Allen Hamilton. But the Justice Department never made an attempt to contest Mr. Trump’s suit. No government lawyer entered an appearance in the case.

That has fueled criticism that the deal the Justice Department struck with Mr. Trump was not a genuine attempt to avoid a loss on the merits to the president in court, but instead a scheme to provide him and his political allies with public benefits.

In a footnote, Judge Williams questioned the provision granting Mr. Trump, his family and their businesses immunity from I.R.S. scrutiny of tax returns they had already filed. She wrote that the audit protection may run afoul of Justice Department rules requiring legal settlements to directly relate to the issues in the suit.

[sheshe2]

1. I sure hope we can stop this two-bit hustle they have set up.

[MustLoveBeagles]

2. I hope so

Whether the fund was intended to pay off his supporters (less likely) or for him to pocket for himself (more likely) it's still wrong.

[sheshe2]

3. I am going with "more likely".

He is stealing, We the People blind.

[MustLoveBeagles]

4. He's empty inside

Stealing all the money in the world still wouldn't be enough for him.

[sheshe2]

5. At his age, with his health...

I really don't think he will be around to enjoy any of it.

[MustLoveBeagles]

6. I agree

I don't think he enjoys anything.

[LetMyPeopleVote]

7. MaddowBlog-Trump to abandon $1.776 billion compensation fund amid bipartisan backlash, source says

The president was left with a choice: Keep fighting an uphill battle or back down from a fight he was likely to lose. He apparently went with the latter.

www.ms.now/rachel-maddo...

BREAKING NEW

Trump to abandon .776 billion compensation fund amid bipartisan backlash, source says

The president was left with a choice: Keep fighting an uphill battle or back down from a fight he was likely to lose. He apparently went with the latter.

😊

— LunaLuvgood2020 (@lunaluvgood2020.bsky.social) 2026-06-01T19:43:33.262Z

https://www.ms.now/rachel-maddow-show/maddowblog/trump-to-drop-anti-weaponization-fund

A few days after the Trump administration unveiled its $1.776 billion compensation fund, acting Attorney General Todd Blanche went to Capitol Hill to brief Senate Republicans on the details and answer their questions. He likely expected some modest pushback, since a handful of GOP senators had already gone on record announcing their opposition to what they described as a “slush fund.”

But Donald Trump’s former defense lawyer probably wasn’t prepared for the ferocity of the response from those in attendance. In fact, we don’t even have to speculate based on leaks from unnamed officials: Republican Sen. Ted Cruz of Texas said on his podcast that his Senate colleagues “screamed” at Blanche, as part of “one of the roughest meetings I’ve seen in my entire time in the Senate.”

“Fiery does not begin to cut it,” Cruz added. “My guess is there [were] probably 45 senators in the room; at least half of them were blasting the attorney general, and they were pissed.”....

The president was left with a choice: Keep fighting an uphill battle for a brazenly corrupt scheme or back down from a fight he was likely to lose. He apparently went with the latter.....

By any fair measure, the fund never should’ve existed in the first place, and many legal scholars characterized it as the single most corrupt step ever taken by an American president. The initiative began with an outlandish $10 billion lawsuit Trump filed against his own administration over the leak of his tax returns during his first term, which he dropped as part of an agreement to create a $1.776 billion fund that would compensate “victims” of the Biden administration, notwithstanding the inconvenient fact that Republicans have never been able to identify any actual, legitimate victims.

There are some key questions that have not yet been answered. For example, the day after the administration announced the fund, Blanche unveiled an addendum of sorts, which said the Internal Revenue Service would no longer scrutinize past or present alleged tax irregularities surrounding the president, his family, and his controversial businesses. The development, among other things, freed Trump from having to worry about a potential $100 million penalty.

Whether this arrangement remains intact as the White House backs off from the existence of the fund remains unclear.

We had two different courts challenge this "fund" as to whether it was a "fraud on the court." The DOJ was not up to litigating these issues and so trump backed down