A federal judge in Florida agreed Friday to reopen President Trump's $10 billion lawsuit against the IRS, ordering both the White House and the Justice Department to explain why 35 former federal judges are wrong to call the case a fraud from start to finish.
U.S. District Judge Kathleen Williams issued a written order directing the parties to file briefs addressing what she described as "grievous allegations", that Trump and the DOJ colluded to file and then dismiss the lawsuit solely to give legal cover to a $1.776 billion settlement fund that Congress never authorized.
The order lands the so-called "anti-weaponization" fund back in judicial crosshairs at the worst possible moment. The fund, created as part of a deal in which Trump dropped his IRS suit, was already temporarily blocked by a separate federal judge. Now the very lawsuit that produced it faces a formal inquiry into whether the court was used as a prop.
Judge Williams did not mince words. Her order laid out the intervenors' claims in detail and treated them as serious enough to warrant full briefing from both sides. The Hill reported that Williams wrote:
"The non-party movants advance grievous allegations that Plaintiffs voluntarily dismissed this litigation solely to avoid judicial scrutiny of a lawsuit that 'was collusive from the start' and was only filed to provide the imprimatur of legality for an unlawful settlement."
Williams noted that the settlement was never formally entered on the court's record, an unusual fact, given its size. Instead, she wrote, "public documents and announcements indicate that the dismissal of this case was premised on a purported settlement between the Parties."
The judge also flagged a specific provision that drew fire from the former judges: a three-paragraph addendum, signed by Acting Attorney General Todd Blanche, that purports to "forever bar and preclude" the United States from pursuing claims against Trump that could otherwise have been asserted. The order noted that the DOJ "did not even try to defend against Plaintiffs' claims" in this case, despite actively opposing nearly identical claims in other litigation.
That contrast sits at the center of the collusion charge. If the government fights the same legal theory in one courtroom but rolls over in another, the question writes itself.
The original lawsuit saw Trump sue the IRS for $10 billion, alleging the agency had been weaponized against him. Rather than go to trial, Trump and the DOJ struck a deal: Trump would drop the suit, and the Justice Department would create a $1.776 billion fund, the "Anti-Weaponization Fund", to compensate Americans who claimed they had been targeted by politically motivated federal government actions during the Biden administration.
Fox News reported that Trump and his sons would receive a formal apology under the deal but would be ineligible for compensation from the fund itself. Acting Attorney General Blanche framed the settlement in sweeping terms:
"The machinery of government should never be weaponized against any American, and it is this Department's intention to make right the wrongs that were previously done while ensuring this never happens again."
The fund was set to operate through the end of Trump's second term. As part of the arrangement, Trump would no longer be subject to IRS tax audits, a benefit that also extended to his two oldest sons and the family business. Previous reports indicated Trump could owe roughly $100 million following audits of prior tax returns.
When the deal was first announced, it was characterized as a legal victory for the president, a concrete acknowledgment that federal agencies had overstepped under the prior administration.
The 35 former federal judges who filed as intervenors see the deal differently. The New York Post reported that the group called on the court to probe the fund's origins, arguing the entire case was manufactured to give a settlement the appearance of judicial legitimacy it never earned.
Their motion asserted that the settlement was a "product of collusion" and a "fraud on the Court." Judge Williams found those claims weighty enough to reopen the case and return it to its status before the parties announced dismissal.
The intervenors' central argument is structural: federal courts require genuine adversity between parties. If both sides of a lawsuit want the same outcome, the case isn't a real dispute, it's theater. And if the theater produces a binding legal settlement worth nearly $1.8 billion, the court has a duty to ask whether it was deceived.
That principle is not partisan. It is a basic safeguard against the abuse of judicial process, one that conservatives have long championed when the shoe was on the other foot.
The anti-weaponization fund drew bipartisan skepticism well before the former judges intervened. Congressional Republicans sponsored legislation to ban the fund outright, asserting that Congress never authorized the spending. Democrats blasted it too, with some claiming the fund could be used to funnel money to individuals who condoned the January 6, 2021, Capitol attack.
The Republican objection is the more consequential one for governance. The Constitution vests spending authority in Congress. If the executive branch can settle a lawsuit it filed against itself and use the proceeds to create a billion-dollar payout program without a single appropriations vote, the power of the purse means very little.
That concern echoes broader tensions between the Trump administration and the judiciary. Federal judges have issued pointed orders on administration actions in a range of policy areas, and the pattern of executive-branch friction with the courts shows no sign of easing.
Judge Williams ordered both Trump and the DOJ to file briefs addressing two questions: whether the parties were truly adverse, and whether the case should be reopened because the court was the "victim of a fraud." The procedural timeline for those briefs has not been specified.
The outcome matters beyond this one case. If Williams finds the lawsuit was collusive, the settlement, including the addendum shielding Trump from IRS audits, could unravel entirely. The anti-weaponization fund, already frozen by another court, would lose whatever legal footing it had left.
For Trump, the stakes are personal and financial. The audit shield alone could be worth $100 million or more, based on prior reporting about his tax exposure. And the broader narrative, that the settlement proved the government had wronged him, depends on the deal surviving judicial review.
The administration has faced a string of mixed results in federal court, and this case now joins a growing list of legal battles where judges are demanding answers the executive branch may not want to give.
Conservatives who cheered the anti-weaponization fund as overdue accountability should not dismiss this judicial inquiry out of hand. The principle that government agencies should not be turned against political opponents is sound. But the principle that the executive branch cannot manufacture a lawsuit, settle it with itself, and spend $1.776 billion without congressional approval is equally sound, and arguably more fundamental.
If the fund was built on a legitimate grievance, it should survive scrutiny. If it was built on a process designed to sidestep the courts and Congress alike, then the 35 former judges are right to say so, and Judge Williams is right to look.
Efforts to address the weaponization of federal agencies deserve serious treatment, not shortcuts that undermine the very institutions conservatives claim to defend.
Accountability that can't withstand a judge's questions isn't accountability. It's a deal cut in the dark.
