Judicial Fury: Trump Appeals ‘Bad-Faith’ IRS Lawsuit Order, Defends Scrapped ‘Lawfare’ Fund Amid AG Nomination Spat

Former President Donald Trump is appealing a federal judge's scathing order that found his $10 billion IRS lawsuit was filed in bad faith to secure an advantageous settlement. The notice of appeal was made public in U.S. District Court in Miami on Friday, mere hours after Trump publicly voiced his frustration over the elimination of a controversial $1.776 billion 'lawfare' fund that was part of the original settlement.

Trump, speaking at a Cabinet meeting, stated, "They've agreed to not have a fund. But there are a lot of people that are very upset about it." He lamented the stalled confirmation of his nominee for U.S. attorney general, Todd Blanche, due to Republican senators seeking written assurance that the fund is indeed defunct.

"The fund is dead, but, you know, I wish it weren't," Trump added, before pivoting to criticism of federal law enforcement's treatment of his supporters.

The appeal, filed by Trump, two of his adult sons, the Trump Organization, and two of their attorneys, targets Judge Kathleen Williams' July 13 ruling. Williams had concluded that the lawsuit, ostensibly concerning the leak of Trump's tax returns, was a ploy to gain "judicial legitimacy for a 'settlement' that had no viable basis in law or fact."

The now-scrapped settlement would have seen Trump and co-plaintiffs drop the suit in exchange for the Department of Justice creating the $1.776 billion fund, intended to compensate individuals claiming to be victims of government 'lawfare.' Blanche, during his Senate testimony, notably did not rule out the possibility of these funds being distributed to individuals charged in connection with the Jan. 6, 2021, Capitol riot – a group for whom Trump has frequently expressed sympathy and granted pardons.

In a Truth Social post on Friday morning, Trump passionately defended the concept of the fund, asserting, "I will always feel that these victims of government abuse should be paid back for what they were forced to endure, their lives have been ruined!" This post was interpreted by some, including Senator Thom Tillis, as suggesting the fund was still a possibility and potentially aimed at Jan. 6 participants, further complicating Blanche's nomination.

The original settlement also included a provision preventing the IRS from pursuing enforcement actions related to the past federal tax returns of Trump, his family members, and their associated entities. Judge Williams harshly criticized this arrangement, stating, "The Court determines that Plaintiffs improperly employed this lawsuit to justify a particular award in this matter — access to taxpayer funds and exemption from audits and other investigations — which was accomplished by leveraging control over Defendants."

In response, Williams imposed several non-monetary sanctions. She referred one of Trump's attorneys, Alejandro Brito, to the Florida Bar for potential disciplinary action and barred another lawyer, Daniel Epstein, from appearing in the Southern Florida federal court for a year. Furthermore, she prohibited Trump and the other parties from using the "settlement agreement" as proof that an actual, legitimate settlement had been reached in the case. While her order did not explicitly void the settlement itself, a DOJ spokesperson at the time dismissed Williams' order, stating, "There was no collusion in this case, and the partisan judge who speculated otherwise has disregarded decades of precedent."