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.
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.
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