Federal Judge Voids Trump IRS Settlement and Orders Review of Attorneys

A federal judge voided a settlement between President Trump and the IRS that would have created a $1.8 billion fund for people who claimed they were unfairly targeted by the prior administration. U.S. District Judge Kathleen M. Williams issued the ruling Monday and directed the court to send a copy to the State Bar of New York.

She also recommended disciplinary action against the attorneys representing Trump in the case.

Williams wrote that she was "extremely troubled" by testimony Blanche gave on May 19, 2026. " The judge noted that Blanche had previously served as Trump's personal lawyer before joining the Department of Justice. She pointed out that the court remained available to review any filings during the lawsuit.

“The Court is extremely troubled by the testimony given by Acting Attorney General Blanche on May 19, 2026. In response to why the 'settlement agreement' had not been submitted to this Court for review, he stated that 'there is no judge' because the case had been dismissed and, therefore, there was 'no mechanism' for reviewing the agreement." — U.S. District Judge Kathleen M. He dropped the suit in May to settle with the agency. The settlement included the $1.8 billion fund. Williams ruled that Trump had "improperly" used the court to give legitimacy to an agreement that would confer immunity to people and entities affiliated with the president. Blanche is scheduled to appear before the Senate Judiciary Committee on Wednesday morning for a confirmation hearing on his nomination to become Attorney General. He told the committee in his opening statement that he is "here today to earn your trust." Williams also referenced an existing ethics complaint against Blanche that is backed by more than 101 former federal and state judges.”