A federal judge in Miami has reopened Donald Trump’s $10bn lawsuit against the Internal Revenue Service (IRS), after a group of former judges alleged that the settlement was a “product of collusion” and a “fraud on the court”. Judge Kathleen Williams issued the ruling on Friday, reviving a case that Trump had dropped last week.
The settlement, which included a controversial $1.8bn “anti-weaponisation” fund to compensate people claiming they were victims of federal government actions, has been widely criticised as a “slush fund”. In exchange for dropping the lawsuit, the US agreed to be “forever barred” from auditing Trump family members’ tax returns, a provision signed only by acting attorney general Todd Blanche, who previously served as Trump’s personal lawyer.
A bipartisan group of 35 former federal judges urged the court to examine the settlement, arguing that Trump used the lawsuit to obtain “unlawful private benefits” and to create a fund without constitutional authority. They also claimed the president tried to shield the deal from judicial oversight by rushing the settlement.
Judge Williams, an Obama appointee, said she was “empowered to investigate serious misconduct” and ordered Trump’s attorneys to respond by 12 June to allegations of collusion and whether the case should be reopened because the court was the “victim of a fraud”. She also questioned the “forever” deal shielding the Trumps from IRS scrutiny.
The original lawsuit stemmed from the leak of Trump’s tax returns by a former IRS contractor, Charles Littlejohn, who was sentenced to five years in prison in 2024. The leak revealed that Trump paid little or no income tax for several years.
Former Trump attorney Michael Cohen, now a critic, said he would apply to the fund, claiming he suffered “identical” financial and personal harm. The fund has sparked controversy over fears it could benefit Trump supporters convicted for their roles in the 6 January 2021 Capitol riot.
