President Donald Trump on Friday took the first step in appealing a federal judge’s ruling that questioned the legality of a lawsuit filed by the president, two of his sons and the Trump Organization against the IRS.
The Trumps filed notice that they would appeal the July 13 ruling by U.S. District Judge Kathleen Williams that said the $10 billion suit was for an “improper purpose.” The case led to the Justice Department creating a $1.8 billion “anti-weaponization” fund as part of a settlement that included an agreement that the government would not investigate or seek any sort of payment from the president, his family members and companies on pending tax claims.
The IRS did not immediately respond to a request for comment on the forthcoming appeal.
A spokesperson for Trump’s legal team said Friday that the IRS “wrongly allowed a rogue, politically-motivated employee to leak private and confidential information about President Trump, his family, and the Trump Organization” to news outlets that was later “illegally released to millions of people.”
A former IRS contractor pleaded guilty in 2023 to stealing Trump’s tax records and thousands of others in 2019 and 2020 before leaking them. He is serving a five-year prison term.
The president sued the IRS and the Treasury Department in January over allegations that the agency was at fault for an unauthorized release of his tax documents that led to a report in The New York Times that said Trump had paid only $750 in federal income taxes in 2016 and 2017.
In her ruling, Williams, a Barack Obama appointee, said Trump sued the IRS over his leaked tax records to “manipulate the judicial process” rather than to “vindicate rights.” She also pointed out that Trump has jurisdiction over the Justice Department, Treasury Department and the IRS.
The ruling said the Justice Department could not portray the settlement with Trump as a judicial agreement. The judge also ordered sanctions against acting Attorney General Todd Blanche, a former personal lawyer to Trump, and Associate Attorney General Stanley Woodward, in addition to asking the Florida Bar Association to consider whether disciplinary action was necessary for one of Trump’s attorneys, Alejandro Brito.
The unprecedented settlement is at the center of a standoff between two Republican senators and the Justice Department that has stalled a vote on Blanche’s nomination for attorney general.
Sens. John Cornyn, R-Texas, and Thom Tillis, R-N.C., have demanded that the DOJ agree to permanently shut down the “anti-weaponization” fund and narrow the audit protection deal before they will commit to advancing Blanche’s nomination.
Trump on Friday morning acknowledged the fund is dead but told reporters, “I wish it weren’t.” He did not answer a question about whether he’d agree to limit the terms of the tax deal for himself, his family and his company.
