A federal judge in Miami 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 a fraud on the court. The ruling by Judge Kathleen Williams revives the case, which Trump had dropped last week after reaching a deal with the Justice Department.
The settlement included a provision that the US is 'forever barred' from auditing the tax returns of Trump family members, and the creation of a controversial $1.8bn 'anti-weaponisation' fund to compensate people who claim they are victims of the federal government. Critics, including some Republicans, have labelled the fund a 'slush fund' and a political liability.
A bipartisan group of 35 former federal judges urged Williams to scrutinise the settlement, arguing that Trump had used the lawsuit to obtain 'unlawful private benefits' and that the deal was rushed to avoid judicial oversight. Williams, an Obama appointee, had previously questioned the conflict of interest posed by Trump being both plaintiff and defendant, given his control over the IRS.
In her order, Williams 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, noting that only Acting Attorney General Todd Blanche signed the provision.
The inquiry could see Justice Department officials, including Blanche, called to testify. The former judges' attorneys praised the court for addressing the 'grievous allegations'. The case stems from the 2024 leak of Trump's tax returns by a former IRS contractor, which revealed he paid little or no income tax for several years.
