Judge rejects Donald Trump’s $1.8 billion IRS settlement that gave him immunity from tax audits

A US judge has struck down a legal agreement between President Donald Trump and federal agencies that gave him immunity from tax audits and allowed his administration to create an abandoned $1.8bn (£1.3bn) “anti-weapon” fund.

The fund, which is intended to compensate individuals who say they have been unfairly targeted by the government, was announced in May after Trump dropped a private $10 billion lawsuit against the Internal Revenue Service (IRS).

But on Monday, U.S. District Judge Kathleen Williams ruled that the charges were mistrial.

She has sent Trump’s lawyer to state officials to determine if ethics rules were violated and if disciplinary action should be taken.

In the ruling, Williams distanced Trump’s lawsuit — filed by him, his two sons and the Trump Organization in 2026 — from a dispute between two opposing parties. Instead, she described it as a move by lawyers with ties to Trump and lawyers who claim to be targets of the government.

Williams wrote that the lawsuit was “never a party seeking judgment on a legal issue or dispute between Trump and the IRS.”

She described the settlement as a bid to “give some legitimacy to an agreement to grant immunity to people and entities associated with the president and allocate billions of dollars from American taxpayers to address grievances not covered by the law.”

The decision prevents those involved in the case — including Trump and his children — from entering into the settlement or citing its terms in future legal proceedings. This, in turn, means the IRS could go after Trump’s tax claims with future audits.

In the first lawsuit, Trump alleged that nothing was done to prevent the release of his personal tax information by former IRS contractor Charles Littlejohn.

In the year Ahead of the 2020 presidential election, which Trump lost, the leaked information was based on a New York Times investigation in 2015. It shows he paid $750 in federal income taxes in 2016, the year he won the presidency, and has paid no taxes in 10 of the past 15 years.

“President Trump has not lived up to his claims,” ​​Williams said, referring to the Justice Department.

“These officials negotiated a ‘settlement’ on behalf of the United States with their current lawyers, including a former White House counsel. It is reasonable to assume that there were disagreements between the parties,” she added.

One of Trump’s lawyers, Alejandro Brito, has been referred to the Florida Bar for disciplinary action, while a second lawyer, Daniel Epstein, will now be barred from participating in cases in the Southern District of Florida for at least a year.

A spokesperson for Trump’s legal team said in a statement to the BBC that the IRS “erroneously allowed a fraudulent, politically motivated employee to release personal and confidential information.”

“President Trump continues to hold America and those who abuse Americans accountable,” the spokesman added.

Brandon DeBot, policy director at the Tax Law Center, called the deal a “sweet deal” that gave Trump “unauthorized and unprecedented” exemptions from tax audit rules, saying it goes against the “protection of the tax system from political interference.”

“The court’s decision is important, but it does not obviate the need for congressional action to overturn the entire agreement and prevent similar attempts in future presidential cases,” he added in a statement to the BBC.

Founded at New York University, the center provides legal analysis of tax and public policy.

Plans for a proposed “anti-gun” fund have been abandoned a week after another judge temporarily blocked Justice Department officials from implementing it.

The order came after two people filed a lawsuit in Virginia claiming the money was discriminatory. The plaintiffs say they have been targeted for political retribution by the Trump administration, but believe they will not be allowed to seek damages.

The plan has drawn criticism from Democrats and some Republicans, including those accused of assaulting police officers in the January 6, 2021, U.S. Capitol riots.