DOJ Faults Judge Who Bashed Trump’s IRS Lawsuit, Settlement

The US Justice Department criticized the judge who penalized President Donald Trump and his lawyers for “bad faith” conduct in his $10 billion lawsuit against the Internal Revenue Service and its controversial settlement, arguing that her ruling was “riddled” with errors.

The US Justice Department criticized the judge who penalized President Donald Trump and his lawyers for “bad faith” conduct in his $10 billion lawsuit against the Internal Revenue Service and its controversial settlement, arguing that her ruling was “riddled” with errors.

In a filing late Wednesday with the federal appeals court in Atlanta, the DOJ escalated its attack on US District Judge Kathleen Williams, the Miami judge who ruled in July that Trump’s unprecedented lawsuit against the IRS was an attempt to manipulate the judicial process. The department accused Williams of playing politics and urged the appeals court to take her off the case.

The settlement ended the suit without a payment to Trump but granted him and his company sweeping immunity from audits for past tax filings. The settlement also included a now-scrapped $1.8 billion “anti-weaponization” fund, which was dropped amid a bipartisan outcry.

Williams’ ruling barred Trump and his administration from citing its supposed settlement in any future regulatory or judicial proceedings, saying the deal had “no viable basis in law or fact.” She also sanctioned his lawyers for bringing the case. 

Acting Deputy Attorney General R. Trent McCotter said in the 43-page filing that Williams overstepped her authority by concluding that the settlement was improper. McCotter also argued Trump did not benefit financially from the accord.

“Plaintiffs sought at least $10 billion in this lawsuit but settled without receiving any money,” McCotter said. “Oddly, the district court repeatedly characterized the parties’ agreement as awarding plaintiffs ‘billions of taxpayer dollars’ — even though the agreement expressly barred plaintiffs from receiving any funds.”

Democrats argued the anti-weaponization fund would have been used to benefit Trump’s allies and supporters, including people who attacked the US Capitol on Jan. 6, 2021.

The appeal seeks to overturn Williams’ order as well as the sanctions. It’s the latest twist in a suit Trump filed in January over the 2019 leak of his tax information to the press, making him the first president to sue his own government. The Justice Department, which represents the IRS and typically vigorously defends claims against the government, never responded to the suit in court.

The judge said it was clear that Trump and his administration intended to settle all along, finding that the “matter was brought for an improper purpose — to gain the imprimatur of judicial legitimacy for a ‘settlement’ that had no viable basis in law or fact.”

In the appeals court filing, the Justice Department said Williams was “grasping at straws to find evidence of the non-existent collusion.”

“The District Court legally erred when it failed to appreciate the Department of Justice’s broad and unreviewable settlement authority, which undercut the court’s entire theory of collusion,” according to the filing.

©2026 Bloomberg L.P.

This article was generated from an automated news agency feed without modifications to text.