Thirty-five former federal judges are fighting to preserve sanctions against President Donald Trump’s legal team over what a federal court found was a “collusive” IRS lawsuit used to funnel $1.776 billion in taxpayer money to his allies.
U.S. District Judge Kathleen Williams, an Obama appointee in Miami, issued a 56-page ruling on July 13 finding that Trump had acted in “bad faith” and filed the lawsuit for an “improper purpose.” She sanctioned his attorneys and barred all parties from ever citing the deal as a legitimate settlement in any official proceeding.
Trump appealed the ruling on July 31, asking Williams to pause the sanctions while the 11th U.S. Circuit Court of Appeals reviewed the case. The 35 former judges filed their opposition to that request Tuesday.
“President Trump is the lead Plaintiff and exercises complete control over Defendants and their counsel,” the judges wrote in the 18-page filing this week.
The government never pushed back. Defendants “did not endeavor to defend their agencies, safeguard taxpayer monies, or even file an appearance,” the judges wrote.
The filing pointed to a specific example: the government failed to raise an expired statute of limitations — a defense it had routinely used in other IRS disclosure cases, the judges noted.
“Plaintiffs acted in bad faith and for an improper purpose by ‘collusively filing a lawsuit with claims subject to multiple dispositive defenses solely to provide cover for a collusive settlement,’” the judges wrote, citing Williams’ ruling.
Trump had filed the $10 billion lawsuit against the Internal Revenue Service in January 2026 over leaked tax records. He dropped it two days before a court deadline requiring both sides to explain how they could even be considered adversaries.
The deal that followed established a $1.776 billion fund for Trump’s allies and shielded Trump, his sons, and the Trump Organization from future IRS tax audits.
“The Parties used the existence of federal litigation as a means of conferring legitimacy upon a course of action that they were unwilling to subject to judicial review,” the judges argued in their opposition filing.
Acting Attorney General Todd Blanche rescinded the fund on Aug. 3 after two Republican senators held up his confirmation as permanent attorney general over the controversy.
“There was never adverseness between the Parties; there was never a case or controversy; and there was never a question as to who would prevail,” Williams wrote in the July 13 order.
The provision permanently shielding Trump, his family, and his businesses from IRS audits, according to CBS News, remains intact.
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