Federal Judges Block Anti-Weaponization Fund, Order Collusion Review in Trump IRS Settlement

One potential IRS dispute covered by the addendum could be worth $100 million or more. The settlement was announced two days before a May 20 briefing deadline Williams had set on whether the case presented a genuine controversy between adverse parties.

IRS officials had issued a memorandum in April 2026 stating that Trump's lawsuit was untimely and that the IRS should not be held responsible for the conduct of a Booz Allen Hamilton contractor.

The Justice Department did not raise those defenses. Thirty-five former federal judges appointed by presidents of both parties filed a motion on May 27 urging Williams to reopen the case. They argued that the settlement was collusive from the start, that the claims were clearly untimely, and that the three-paragraph addendum purporting to bar the United States from pursuing claims against the plaintiffs conferred extraordinary benefits for which no consideration was provided to the government.

The settlement agreement states that the five-member board administering the fund is under Trump's control and will stop accepting claims a month and a half before he leaves office. A Justice Department rule issued during Trump's first term and reaffirmed by Pam Bondi in February 2025 generally bars settlement payments to non-governmental persons or entities that are not parties to the dispute.

The Wall Street Journal reported on May 30 that Trump's top aides had discussed whether he should kill the Anti-Weaponization Fund in exchange for immigration enforcement funding.

A bill providing that funding was derailed by Republican objections to the fund. Trump issued an executive order in February 2025 prohibiting Justice Department lawyers from advancing any interpretation of the law that contravenes the president's position.

Alina Habba, one of Trump's attorneys, attended Littlejohn's guilty plea hearing and stated that the leak was an egregious breach that cost her client thousands of votes in the 2020 presidential election.

The settlement agreement describes abuses of lawfare and weaponization as peculiar to Democrats.