{"id":23501,"date":"2026-06-02T09:22:16","date_gmt":"2026-06-02T09:22:16","guid":{"rendered":"https:\/\/bluelightnews.com\/category\/politics\/even-if-trump-kills-his-1-8-billion-slush-fund-his-irs-lawsuit-headache-isnt-over\/"},"modified":"2026-06-02T09:22:16","modified_gmt":"2026-06-02T09:22:16","slug":"even-if-trump-kills-his-1-8-billion-slush-fund-his-irs-lawsuit-headache-isnt-over","status":"publish","type":"post","link":"https:\/\/bluelightnews.com\/category\/politics\/even-if-trump-kills-his-1-8-billion-slush-fund-his-irs-lawsuit-headache-isnt-over\/","title":{"rendered":"Even if Trump kills his $1.8 billion slush fund, his IRS lawsuit headache isn\u2019t over"},"content":{"rendered":"
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By<\/span>Nick Akerman<\/span><\/p>\n<\/div>\n

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President Donald Trump is in a legal bind of his own making.<\/p>\n

Reports emerged Monday that Trump, under pressure from Republican lawmakers<\/a>is preparing to drop the $1.776 billion “anti-weaponization” fund<\/a> that sparked public outrage<\/a>political chaos<\/a> and, crucially, legal questions<\/a>. The Justice Department announced it would temporarily pause implementation to comply with a court order<\/a>.<\/p>\n

There’s no indication that Trump would also drop the IRS immunity that was part of his controversial lawsuit settlement. Therefore, a federal judge is likely to proceed in her inquiry that poses a significant legal threat to Trump.<\/p>\n

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The president may be preparing to drop the settlement fund that has sparked political backlash, but if he attempts to hold on to the IRS immunity, he would still have to answer to Williams.<\/p>\n<\/blockquote>\n<\/figure>\n

Judge Kathleen M. Williams signaled Friday that she is deciding whether to reopen Trump’s $10 billion lawsuit against the IRS<\/a> in order to investigate the propriety of the lawsuit and the subsequent settlement.<\/p>\n

Trump, of course, had recently withdrawn the lawsuit he filed in January against government agencies under his control<\/a>. The Department of Justice later announced a settlement<\/a> that created a slush fund for allies and precludes future IRS investigation<\/a> of him, other Trump family members and Trump businesses.<\/p>\n

The settlement in the wake of Trump’s dubious lawsuit reeked of self-dealing — and now the judge’s order<\/a> may leave Trump with little room to maneuver. The president may be preparing to drop the settlement fund that has sparked political backlash<\/a>but if he attempts to hold on to the IRS immunity, he would still have to answer to Williams.<\/p>\n

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A lawsuit is valid only when there is “a case or controversy” between adverse parties. Since Trump controls the executive branch, there was an obvious lack of adversity between a sitting president and entities whose decisions were subject to his direction. From the outset, Williams, who presides over the case in the Southern District of Florida, expressed skepticism of the lawsuit’s legitimacy. She asked the parties to submit briefs addressing whether the lawsuit was, in fact, a legitimate adverse proceeding.<\/p>\n

Two days before the briefs were due last month, Trump moved to dismiss the case. Williams granted the motion but was not informed about the settlement<\/a> the Justice Department later announced.<\/p>\n

Last week, 35 former federal judges filed a motion<\/a> asking Williams to reopen the case. They argued that “the purported ‘settlement’ that the parties never placed before this Court raises profound questions about the parties’ candor toward the Court and manipulation of the judicial system, which threatens to undermine confidence in the administration of justice.” The settlement is “a fraud on the Court,” they wrote.<\/p>\n

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Other lawsuits have been filed over the settlement, but Williams’ court is by far the best forum for addressing this settlement. One suit was brought in Washington, D.C., by former Capitol Police officers who defended the Capitol on Jan. 6, 2021<\/a>. The other was filed in Virginia by public and nonprofit entities. A federal judge’s temporary order in the Virginia lawsuit is what the Justice Department responded to Monday<\/a>. Those two suits challenge the creation of the fund, but neither addresses the issue of future IRS immunity. The two lawsuits are also likely to be dismissed for lack of standing over the plaintiffs’ failure to show a concrete injury traceable to the settlement.<\/p>\n

Judge Williams, by contrast, is positioned to unravel the entire agreement. Federal courts possess inherent contempt powers and may investigate and remedy improper conduct by attorneys and litigants. That authority can include appointing a private attorney to assist in investigating and prosecuting criminal contempt — when, as here, there is reason to believe the Justice Department has a conflict.<\/p>\n

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Two days after the 35 former judges filed their motion, Judge Williams issued an order<\/a> in response. The court, she wrote, “is empowered to investigate serious misconduct as a collateral issue” and to determine whether the suit was filed for an “improper purpose.”<\/p>\n

Among the key points in her order:<\/p>\n