A US Federal judge has voided a settlement that would permanently block the IRS from auditing past tax claims by President Trump and his family. US District Judge Kathleen Williams said the suit was filed for an improper purpose. President Trump and federal agencies reached a legal agreement that granted him immunity from tax audits and allowed his administration to create a since-abandoned $1.8B “anti-weaponisation” fund.
In the ruling, Williams cast Trump’s lawsuit – which he, two of his sons and the Trump Organization filed in 2026 – as far from a dispute between two opposing sides. Instead, she described it as more of an action carried out by lawyers with ties to Trump and those who claimed to have been government targets. Williams wrote that the lawsuit “was never about a party seeking judicial resolution of a legal issue or a factual dispute” between Trump and the IRS, which he controls as president.
Trump sued the IRS in January, accusing the agency of not properly safeguarding his financial information and allowing a former contractor to access his tax returns and disseminate them to “leftist media outlets” like The New York Times and ProPublica. The president’s sons, Donald Trump Jr. and Eric Trump, joined the lawsuit along with the Trump Organization. Trump sued in his personal capacity and not in his official capacity as president.
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Additionally, the US Judge also described the settlement as a bid to “provide some legitimacy to an agreement to confer immunity to people and entities affiliated with the President and to earmark billions of dollars from American taxpayers to redress grievances not defined in the law.” In the initial lawsuit, Trump claimed that nothing had been done to prevent the leak of his private tax information by a former IRS contractor, Charles Littlejohn.