Judge throws out Donald Trump’s ‘improper’ $1.8b in IRS payments that gave him immunity from tax audits

A US judge has struck down a formal deal between President Donald Trump and government agencies that gave him immunity from tax audits and allowed his administration to build up a $1.8bn (£1.3bn) “anti-weapons” fund.

The fund, which was intended to compensate people who say they were wrongfully targeted by the government, was unveiled in May so Trump could settle his $10bn lawsuit against the Internal Revenue Service (IRS).

But on Monday, US District Judge Kathleen Williams said the lawsuit was filed with improper intent.

He also referred Trump’s attorney to federal authorities to determine whether ethics laws were violated and whether he should be disciplined.

In his decision, Williams put Trump’s case – himself, his two sons and the Trump Organization in 2026 – away from the conflict between the two opposing parties. Instead, he described it as an act carried out by lawyers with ties to Trump and those who say they were targeted by the government.

Williams wrote that the lawsuit was “not at all a party seeking legal resolution of a legal issue or factual dispute” between Trump and the IRS, which he controls as president.

He also described the agreement as a bid to “provide legitimacy to the agreement to grant immunity to individuals and organizations connected to the President and to allocate billions of dollars to American taxpayers to settle unspecified complaints.”

The ruling also bars those involved in the case — including Trump and his sons — from speaking about the settlement or citing its terms in future legal proceedings. This, in turn, could mean the IRS could move forward with future audits of Trump’s tax claims.

In the first lawsuit, Trump said he did nothing to prevent the leak of his personal tax information by former IRS contractor Charles Littlejohn.

Just before the 2020 presidential election, which Trump lost, the leaked information became the basis of a New York Times investigation that revealed that he paid only $750 in income tax in the year he won his presidency in 2016, and no tax at all in 10 of the last 15 years.

“President Trump did not follow through on his claims until he retook the White House and appointed his former lawyer, as well as the former lawyer for the beneficiaries of the ‘Anti-Weaponization Fund’ to senior positions at the DOJ,” Williams wrote, referring to the Justice Department.

“These officials then negotiated on behalf of the United States, with his current lawyers, including his former White House Counsel to reach a ‘deal.’ It is surprising to suggest that there has been disagreement between the Parties,” he added.

One of Trump’s attorneys, Alejandro Brito, has also been referred to the Florida bar for disciplinary action, and a second attorney, Daniel Epstein, will now be barred from joining cases in the South Florida district for at least a year.

In a statement sent to the BBC, a spokesman for Trump’s legal team said the IRS had “improperly allowed a corrupt, politically motivated employee to leak classified and classified information” to the media.

“President Trump continues to hold those who mistake America for Americans,” the spokesman added.

Calling the deal a “sweet deal” for Trump that gave him an “unauthorized and unprecedented” exemption from tax audit rules, Tax Institute Policy Director Brandon DeBot said it ran counter to “protecting the tax system from political interference.”

“The court’s decision is important, but it does not remove the need for Congress to overturn the entire agreement and prevent any similar attempts to hold the president accountable in the future,” he added in a BBC statement.

Based at New York University, this institute provides legal analysis of tax and public policy.

Plans for the proposed “anti-gun” fund were scrapped in early June, a week after another judge temporarily blocked Justice Department officials from implementing it.

That order came down after two men who said the fund was discriminatory filed a lawsuit in Virginia. The plaintiffs said they were targeted for political retaliation by the Trump administration but believe they will not be allowed to file compensation claims.

The much-criticized plan has prompted warnings from Democrats – and some Republicans – that it could lead to paybacks for people prosecuted for violence at the US Capitol on January 6, 2021, including those convicted of assaulting police officers.