Trump’s lawyers filed an unexpected appeal this week after Judge Williams voided the provisions of a proposed IRS settlement and said Donald Trump and his legal team acted in bad faith. The filing keeps alive a fight over a $10 billion claim tied to taxpayer funds, even though Trump had already withdrawn the litigation in May.
The appeal lands now because the judge’s latest order did more than reject the deal. It barred the parties from referring to the agreement as a settlement at all, then ordered sanctions and disciplinary referrals tied to Trump’s lawyer. Williams also said the suit was filed for an improper purpose and that it was an attempt to use the court to give legitimacy to an agreement meant to confer immunity on people and entities affiliated with the president.
That ruling centers on Trump’s lawsuit against the Internal Revenue Service over returns leaked by a contractor during his first term. Soon after Trump pulled the case in May, the administration unveiled a $1.766 billion compensation fund, a move that drew bipartisan backlash and was described by critics as a slush fund. Williams later found that the case and the settlement effort could not be treated as a clean resolution to the dispute.
The judge had already shown skepticism in late May after a request from 35 former federal judges and ordered Trump and his lawyers to answer allegations that he had committed fraud on the court. Williams sent a copy of that order to both the New York and District of Columbia bar associations, and the referral matters because Todd Blanche and Stanley Woodward are members of both. The appeal now puts those findings back in play, but it does not erase them.
What Trump’s lawyers are actually asking the court to reverse is the finding that the arrangement was not a valid settlement at all. If the appeal succeeds, the voided provisions could be restored and the sanctions fight could narrow; if it fails, the court’s ruling leaves the agreement with no legal standing and keeps the disciplinary process alive. For now, the case that Trump tried to leave behind in May is still moving, this time on the strength of the appeal his lawyers filed this week.
