Ex-federal judges ask court to reopen Trump’s IRS lawsuit, probe payout fund

A group of retired federal judges is asking a U.S. district court judge to reopen a lawsuit President Donald Trump and his family pursued against the IRS over leaked tax records, asking the court to investigate whether an unusual deal to end the case was an act of fraud.

The retired judges’ filing marks the latest effort to block a deal that is expected to benefit Trump, his family and his allies. Trump recently agreed to drop his family’s lawsuit against the IRS as part of an agreement that establishes a nearly $1.8 billion Justice Department fund to compensate those who, like him, have claimed they have been targets of a “weaponized” justice system.

The Justice Department has said Trump will get an apology but no money from the fund. As part of the agreement, the IRS is barred from pursuing unpaid tax claims against Trump, members of his family or his businesses that arose before the deal was reached.

The 35 former judges, appointed by presidents of both parties, wrote in Wednesday’s filing in federal court in Florida that the plaintiffs misled the court by not disclosing any settlement in their notice to voluntarily dismiss the lawsuit.

“The purported “settlement” that the parties never placed before this Court raises profound questions about the parties’ candor toward the Court and manipulation of the judicial system, which threatens to undermine confidence in the administration of justice,” the judges wrote.

Trump, his two eldest sons and his family business filed their suit against the IRS in January, seeking as much as $10 billion in damages for the theft of their tax filings by a former agency consultant, who then leaked them to news organizations. U.S. District Judge Kathleen Williams in South Florida, who had been overseeing the lawsuit, had questioned whether the parties were “sufficiently adverse,” because Trump was both a plaintiff and the president overseeing the agencies he was suing.

After the plaintiffs asked to voluntarily drop the lawsuit, Williams dismissed and closed the case, noting that there was “no settlement of record.” The president’s attorneys said in a court filing that they did not believe their deal with the IRS required judicial approval.

The former judges asked the court to utilize a rule that would allow Williams to set aside the judgment and reopen the case for a “judicial review of the extraordinary — and historically unprecedented — circumstances presented by this litigation and by the collusive ‘settlement’ that invokes this litigation as the legal justification for its terms.”

The former judges argued that Trump and the federal government is improperly using the IRS lawsuit “to allow a ‘commission’ controlled by the President to dole out $1.776 billion in taxpayer dollars without constitutional or congressional authority” and to obtain “unlawful private benefits to the President and his family” by barring any audits of prior taxes.

Parties to the lawsuit, the former judges claimed, “have plainly tried to shield this conduct from necessary judicial scrutiny by short-circuiting” Williams’s examination into whether the lawsuit was “in fact an actual case or controversy.”

The list of signatories includes retired U.S. district court judges, former magistrates and bankruptcy court judges and five retired federal appeals court judges. They are represented by the nonprofit group Democracy Defenders, Susman Godfrey, and Platkin L.L.P.

The Justice Department and Trump’s lawyers did not immediately respond to requests for comment.

The payout fund has sparked concerns among legal experts and ethics watchdogs. It has even become a rare point of friction between the president and Republicans on Capitol Hill.

Republicans postponed plans last week to pass tens of billions of dollars in additional funding for immigration enforcement agencies after widespread frustration over the fund. Senate Republicans also peppered acting attorney general Todd Blanche with questions about the fund’s guardrails, two Senate GOP aides familiar with the meeting told The Washington Post.

Trump has defended the fund, writing on Truth Social last week that he could have settled “for an absolute fortune” but instead was “helping others, who were so badly abused by an evil, corrupt, and weaponized Biden Administration.”

Under the terms of the agreement, Trump will withdraw two other legal claims he had filed against the government seeking hundreds of millions of dollars.

An addendum posted the day after the agreement was released said the IRS was blocked from pursuing claims against Trump, his relatives or his businesses that preceded the settlement. It does not include any language limiting future audits.

• Mark Berman, Jeremy Roebuck and Perry Stein contributed.