POTUS sued the IRS for $10 billion over the leak of his tax information by an agency contractor. The case was quietly resolved out of court in May with a settlement that gave Trump, his family, and related business entities effective immunity from IRS audits, prosecution, or regulatory enforcement for tax returns filed up to that point, plus creation of a $1.776 billion "Anti-Weaponization Fund" meant to compensate people who claimed to be unfairly targeted by prosecutors. That fund was later abandoned after congressional blowback.
U.S. District Judge Kathleen Williams issued a 56-page order Monday that didn't just criticize the deal — it took concrete action:
- Referred Trump's attorney Alejandro Brito to the Florida Bar for potential disciplinary action.
- Restricted a second attorney, Daniel Epstein, from practicing in the Southern District of Florida for up to a year.
- Barred Trump, DOJ, and the IRS from citing the settlement in any future judicial, administrative, or regulatory proceeding as if it were a legitimate legal resolution.
- Sent copies of her order to the New York State Bar and DC Bar, since acting AG Todd Blanche and Associate AG Stanley Woodward — both of whom signed the settlement — are members there.
Judge Williams built the ruling around a basic constitutional requirement: federal courts can only hear real disputes between parties with genuinely opposing interests — not one party negotiating with itself. Since Trump, as president, has the constitutional and statutory power to appoint and remove the very officials running the IRS and Treasury Department (he'd fired the previous IRS commissioner just months earlier), she found there was no true adversary on the other side of the case — it was, functionally, one party on both sides of the table.
The suspicious timeline
The underlying leak happened during Trump's first term (2018 IRS contractor breach), and the leaker was prosecuted back in 2023 under the Biden administration. But Trump didn't file this suit until January 2026 — after retaking office and installing his own former personal defense attorney (Todd Blanche) as acting Attorney General. The case moved from filing to "settlement" in just 109 days, with the government never even filing a single defensive pleading — a dramatic departure from how DOJ fought nearly identical claims in other, private-plaintiff lawsuits over the same leak.
The signature detai flagged
The attorney who signed the settlement on Trump's behalf, Daniel Epstein, was never formally admitted to appear in the case — his "pro hac vice" application was listed as "forthcoming" and never filed. She noted he'd sought that formal admission promptly in several other cases, suggesting he knew from the start he'd never actually need to litigate this one.
Conflicts of interest raised
Both DOJ signatories on the settlement — Blanche and Associate AG Stanley Woodward — had previously served as personal defense attorneys for Trump or his co-defendants in the Mar-a-Lago documents case and January 6th cases, the same categories of grievance the new "Anti-Weaponization Fund" was meant to compensate.
The sanctions:
- Attorney Alejandro Brito referred to the Florida Bar for discipline review.
- Attorney Daniel Epstein barred from any pro hac vice admission in the Southern District of Florida for one year.
- Trump, DOJ, and the IRS barred from citing the settlement as a legitimate resolution in any future proceeding.
- She additionally found the conduct met the standard for the court's separate "inherent authority" sanctions (a bad-faith finding, distinct from Rule 11), and ordered monetary sanctions covering the fees of court-appointed amici attorneys who briefed the jurisdictional questions.
One structural note worth flagging. The judge also pointed out that a DOJ official had separately stated he intended to personally apply for money from the same fund — which, if true, is a pretty remarkable additional wrinkle.