Judge voids $1.8bn IRS settlement that shielded Trump from tax audits

Sun Sep 06 2026 10:16:49 GMT+0000 (Coordinated Universal Time)

A federal judge has invalidated a deal that gave former President Trump immunity from IRS audits and allowed a contentious $1.8bn fund to be allocated to alleged allies.

US district judge Kathleen Williams declared void a settlement between President Trump and federal agencies that had granted him protection from tax audits, invalidating the agreement for seeking political leverage. The settlement, which was exchanged for Trump dropping a $10bn tax lawsuit, also enabled the administration to earmark $1.8bn for an "anti‑weaponisation" fund aimed at compensating alleged victims of government retaliation. Williams found the lawsuit had no genuine legal dispute and referred Trump’s lawyers for possible disciplinary action. The ruling leaves the IRS free to pursue future audits of Trump, his family, and their businesses, highlighting the need for congressional oversight to prevent similar political self‑dealing.

US judge has voided a legal agreement that granted former President Donald Trump and his associates immunity from IRS tax audits.

The settlement, exchanged for Trump dropping a $10bn lawsuit against the IRS, also set up a now‑abandoned $1.8bn ‘anti‑weaponisation’ fund intended to compensate those who claimed they were unfairly targeted by the government.

Judge Kathleen Williams said the lawsuit was filed for an improper purpose, describing it as a politically motivated action rather than a genuine legal dispute.

She also referred two of Trump’s attorneys to state bar associations for potential disciplinary action and barred the settlement from being cited in future cases.

With the agreement now void, the IRS can move ahead with audits of Trump, his sons and the Trump Organization’s tax filings, raising concerns about the scope of tax law protections against political interference.

The $1.8bn fund plan was abandoned just weeks after a judge temporarily halted its implementation following a lawsuit from those claiming the fund discriminated against them.

Critics, including Democrats, some Republicans and former Vice President Mike Pence, warned that the fund could have paid those convicted of actions related to the 6 January 2021 Capitol riot, intensifying scrutiny over Trump’s use of federal resources for personal benefit.

Law experts say the court ruling is a step forward, but that congressional action is still needed to nullify the entire agreement and prevent similar attempts at presidential self‑dealing in the future.