A federal judge ruled that Donald Trump's $10 billion lawsuit against the IRS was filed for an 'improper purpose' — specifically, to 'manipulate the judicial process' rather than to actually vindicate any rights. Trump's response to being caught manipulating the judicial process was, naturally, to keep manipulating the judicial process. He filed notice of appeal on Friday.
The Lawsuit That Was Never Really About the Lawsuit
Here's the setup. A former IRS contractor stole Trump's tax records in 2019 and 2020, and those records eventually made their way to The New York Times, which reported that Trump paid exactly $750 in federal income taxes in 2016 and 2017. The contractor pleaded guilty in 2023 and is currently serving a five-year prison sentence. Real crime. Real consequences. Case closed, right?
Not for Trump. In January, he, his two sons, and the Trump Organization sued the IRS and the Treasury Department for $10 billion over that leak. According to NBC News, U.S. District Judge Kathleen Williams looked at this lawsuit and concluded it was filed to 'manipulate the judicial process' rather than to 'vindicate rights.' She also pointed out something so obvious it's almost funny: Trump is the president. He runs the Justice Department, the Treasury Department, and the IRS. He sued agencies he controls, for $10 billion, over a leak committed by someone already convicted and imprisoned for it.
The Settlement That Shouldn't Exist
Before the judge could shut this down entirely, the Justice Department did something extraordinary. It created a $1.8 billion 'anti-weaponization' fund as part of a settlement with Trump. As part of that deal, NBC News reports, the government agreed it would not investigate or seek any payment from the president, his family members, or his companies on pending tax claims. Let that breathe for a second.
The sitting president sued a federal agency he controls, and the Justice Department he also controls responded by creating a fund and promising not to audit him or his family. Judge Williams ruled the DOJ could not portray this arrangement as a legitimate judicial agreement. She also ordered sanctions against acting Attorney General Todd Blanche, who is, of course, Trump's former personal lawyer, and Associate Attorney General Stanley Woodward. She referred one of Trump's attorneys, Alejandro Brito, to the Florida Bar Association for potential disciplinary action.
This is the kind of story you'd pitch to a political thriller screenwriter and they'd send back saying it was too on the nose.
Two Republican Senators Are Somehow the Heroes Here
The 'anti-weaponization' fund has created a genuinely bizarre situation where Republican senators John Cornyn of Texas and Thom Tillis of North Carolina are the ones pumping the brakes. According to NBC News, both senators have refused to advance Blanche's nomination for attorney general until the DOJ agrees to permanently shut down the fund and narrow the terms of the audit protection deal.
This is a real standoff. Two Republicans, in a party that has spent a decade treating Trump's whims as sacred law, are holding up his attorney general pick over this specific deal. That tells you something about how indefensible even some Republicans find the arrangement when they have to put their names next to it.
Trump Wishes the Fund Wasn't Dead, Won't Say Whether He'll Limit His Own Deal
On Friday morning, Trump acknowledged the fund is effectively done. 'I wish it weren't,' he told reporters, per NBC News. When asked whether he'd agree to limit the terms of the tax deal protecting himself, his family, and his company, he said nothing. He did not answer the question.
That silence is a complete sentence. The man who sued for $10 billion over a tax leak by someone already in prison, whose Justice Department then created a fund to settle that suit and exempted him from future tax scrutiny, who is now appealing a judge's ruling that the whole thing was improper, does not want to narrow the deal protecting his family's finances from federal review. Shocking. Truly.
His legal team's statement Friday, per NBC News, accused the IRS of wrongly allowing a 'rogue, politically-motivated employee' to leak private information. That employee is in federal prison. The statement did not mention that part.
The Dingo Take
You are supposed to believe this is a story about a president defending his family's privacy. It is not. It is a story about a president using the courts, the Justice Department, and two billion dollars in taxpayer-adjacent funds to make sure no one ever gets to look too closely at his taxes again. The man paid $750 in federal income taxes in two of his most profitable years. The person who leaked that information is in prison. And yet here we are, with the sitting president's own Justice Department cutting him a deal that amounts to a permanent 'do not audit' sign hung on the Trump Organization's front door.
Judge Williams called it what it was. She said the lawsuit was filed to manipulate the judicial process. She sanctioned the acting attorney general. She referred one of Trump's lawyers to the bar. That's a federal judge, appointed by Obama, doing exactly what federal judges are supposed to do when someone tries to use litigation as a power play. The response from Team Trump was to immediately appeal, because of course it was.
The part that should keep you up at night isn't the brazenness. It's the architecture. The president controls the agency he sued. His former personal lawyer runs the Justice Department that settled the case. The settlement created a fund and shielded his family from tax scrutiny. This isn't corruption hiding in the shadows. It's corruption that filed paperwork, held press conferences, and is now asking a federal appeals court to bless the whole arrangement. Two Republican senators are drawing a line, which would be more reassuring if it weren't the lowest possible bar, cleared by exactly two people.
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