Trump Appeals Judge’s Finding That $10B IRS Lawsuit Was Intended to 'Manipulate' Courts

President Donald Trump filed notice Friday that he will appeal a July 13 ruling by U.S. District Judge Kathleen Williams that questioned the legality of a $10 billion lawsuit he, two of his sons and the Trump Organization brought against the Internal Revenue Service.

Williams, an appointee of President Barack Obama, concluded the suit was filed for an "improper purpose," saying it appeared aimed at "manipulat[ing] the judicial process" rather than to vindicate legal rights. The judge also noted that the president has authority over the Justice Department, the Treasury Department and the IRS, a point she cited in assessing the case.

The lawsuit followed a settlement between the government and Mr. Trump that created a $1.8 billion "anti-weaponization" fund and included protections that the Justice Department would not pursue certain tax investigations or seek payments tied to pending tax claims involving the president, his family or associated companies. Williams' ruling said the Justice Department could not treat that settlement as a judicial agreement.

The judge ordered sanctions against acting Attorney General Todd Blanche — who previously served as a personal lawyer to Trump — and Associate Attorney General Stanley Woodward. She also asked the Florida Bar Association to consider whether disciplinary action is warranted for one of Trump’s attorneys, Alejandro Brito.

Two Republican senators, John Cornyn of Texas and Thom Tillis of North Carolina, have cited the settlement as the basis for blocking a Senate vote on Blanche's confirmation as attorney general. They have demanded the DOJ dismantle the anti-weaponization fund and narrow the audit protections before advancing his nomination.

A spokesperson for Trump's legal team said the IRS "wrongly allowed a rogue, politically-motivated employee to leak private and confidential information" about the president, his family and the Trump Organization to news outlets. 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 IRS did not immediately respond to a request for comment on the appeal. When asked about the fund on Friday, Trump acknowledged it is no longer active and said, "I wish it weren't," but he declined to say whether he would accept narrowed protections in the settlement for himself and his companies.

What’s next: The Trump team has formally begun the appeals process, and the dispute over the settlement and the associated sanctions has become a central issue in the stalled confirmation of the acting attorney general.