Miami federal judge probes Trump’s $1.8 billion IRS lawsuit settlement

A federal judge in Miami is looking into allegations that Donald Trump defrauded her court by suing the IRS for the sole purpose of forcing a $1.8 billion settlement that would pay out victims of “government weaponization” and shut the door on the government’s pursuit of tax claims against the president, his family and their companies.

U.S. District Judge Kathleen Williams launched the inquiry on Friday in a four-page order that threatened to reopen the case, which Trump and his administration settled last week.

At the behest of dozens of retired federal judges, Williams directed Trump’s attorneys to file a response by June 12 rebutting allegations that his lawsuit was merely a pretext to the settlement, which was not made public until after Williams agreed to close the case.

“The Court was deceived,” the request by the former federal judges reads.

Williams’ ruling could reignite a case that has roiled Washington, where the deal arranged between the president, Internal Revenue Service and Department of Justice has been met with bipartisan outrage and questions about how the president could sue and settle with his own administration. Also, Friday, a judge in Virginia blocked the Trump administration from releasing money from the newly created fund until a lawsuit challenging the validity of the settlement is resolved.

In January, Trump and his son, Eric Trump, filed a $10 billion lawsuit against the IRS, alleging that their former contractor Charles “Chaz” Littlejohn, leaked their tax returns to media outlets in 2019 and 2020.

But before the lawsuit ever advanced in court, Trump requested that the case be voluntarily dismissed. Then the Department of Justice announced that, instead of Trump receiving any monetary payment or damages of any kind, he would get a formal apology and that Acting Attorney General Todd Blanche would launch the“Anti-Weaponization Fund.”

“They have agreed, in exchange for the creation of this fund, to drop their pending lawsuit with prejudice, and also withdraw two administrative claims including for damages resulting from the unlawful raid of Mar-a-Lago and the Russia-collusion hoax,” a DOJ press release reads.

The fund will make payouts to people described in the settlement as victims of government weaponization.

This immediately generated buzz among hundreds of people Trump pardoned for their roles in storming the Capitol on Jan. 6, 2021, with many announcing their intention to pursue payouts. This group includes Enrique Tarrio, the former Proud Boys leader from Miami, who was pardoned by Trump after serving only three years of his 22-year sentence for his role in planning the Jan. 6 attack.

“I was targeted, and I do believe that this fund does apply to me,” Tarrio told Miami Herald news partner CBS Miami.

Blanche also signed an addendum to the settlement blocking the IRS from pursuing a series of claims against the Trumps and the Trump Organization.

But on Wednesday, 35 former federal judges urged Williams to reopen the case and determine whether Trump’s effort defrauded the court system. Though the judges were not a party to the lawsuit, they said Williams could pull a procedural lever obligating her to investigate the closure of the case and the federal government’s decision to leave her in the dark on the legal settlement.

“The parties have used this lawsuit ... as a means to allow a ‘commission’ controlled by the President to dole out $1.776 billion in taxpayer dollars without constitutional or congressional authority to do so, and to confer unlawful private benefits to the President and his family by purportedly prohibiting the United States from prosecuting any and all claims against them,” their briefing stated.

Williams’ order also highlighted the former judges’ assertions that Trump’s lawyers allegedly recognized from the beginning that the lawsuit was unfounded and filed it solely to facilitate a settlement.

“A party’s decision to file a frivolous lawsuit for the sole purpose of forcing a settlement may qualify as such an improper purpose,” Williams’ order reads.

READ MORE: Who is Kathleen Williams?

The ruling is the latest high-profile clash between Williams and Republican officials. Last year, the judge, appointed to the federal bench by Barack Obama, held Florida’s attorney general in contempt of court and separately ordered the closure of Florida’s Alligator Alcatraz immigration detention center. That order was recently overturned.

This story was originally published May 30, 2026 at 2:51 PM.