A federal judge has reopened Donald Trump's $10bn lawsuit against the Internal Revenue Service (IRS) after a third-party motion alleged that the settlement was a product of collusion and fraud. The ruling by Judge Kathleen Williams in Miami revives the case, which Trump dropped last week after reaching a deal with the Justice Department.
The settlement included a provision barring future audits of Trump family tax returns and established a controversial $1.8bn 'anti-weaponisation' fund to compensate people claiming to be victims of federal government targeting. Critics, including some Republicans, have called the fund a 'slush fund' and a political liability.
The motion to reopen the case was filed by a bipartisan group of 35 former federal judges, who argued that Trump used the lawsuit to obtain unlawful private benefits and 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, questioned whether the case presented a genuine conflict, given that Trump controls the IRS. She ordered attorneys to respond by 12 June on whether the case should be reopened due to potential fraud and whether Trump colluded with his own government to avoid 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 Trump paid little or no income tax for several years.
