A federal judge reopened Donald Trump’s $10 billion lawsuit against the Internal Revenue Service on Friday, pulling back into court a case he had dropped last week and putting a controversial settlement under fresh scrutiny.
The move matters now because the settlement did more than end a fight over leaked tax returns. Todd Blanche said it left the US forever barred from auditing the tax returns of Trump family members, while the Justice Department also unveiled a $1.8 billion fund to compensate people who claim they were harmed by the federal government. That combination has already drawn fire from lawmakers, including some Republicans, and it is now back in front of Judge Kathleen Williams.
Williams ordered Trump’s attorneys to tell her by 12 June how they respond to the charges of collusion and whether the parties were truly adverse. She also asked whether the case should be reopened because the court was the victim of a fraud. In her order, Williams said she was empowered to investigate serious misconduct and questioned whether the deal had been crafted to avoid judicial scrutiny.
The lawsuit began after personal and business tax returns belonging to Trump and his sons were leaked by a former contractor. Trump later dropped the case, but 35 former federal judges urged Williams to look more closely at the settlement after it was publicly disclosed. Their objection was blunt: they said the purported settlement raised profound questions about candor toward the court and about manipulation of the judicial system that could undermine confidence in the administration of justice.
The friction in the case is hard to miss. Only Blanche signed the provision shielding the Trumps from IRS scrutiny, even as the broader settlement was presented as a resolution involving the government. Williams had already raised the possibility that Trump was effectively controlling both sides of the dispute because he controls the IRS through the executive branch, and that concern now sits at the center of her reopened review.
What happens next is narrow but important. Trump’s lawyers must explain by 12 June why the settlement should stand, and Williams may then decide whether the court should probe further into whether the agreement was proper or whether it was reached in a way that tainted the case itself.
