U.S. District Judge Kathleen Williams criticized President Donald Trump's IRS settlement on July 13, 2026, reviving controversy over the administration's abandoned $1.776 billion anti-weaponization fund. In a 56-page order, Williams sanctioned attorneys involved in the case and prohibited both sides from citing the agreement as a recognized judicial settlement in future proceedings.
Williams stated that the lawsuit aimed to use the court to legitimize an agreement that conferred immunity to individuals affiliated with the President and allocated taxpayer funds to address grievances not defined by law. The ruling also brought renewed scrutiny to the now-abandoned anti-weaponization fund, which the Justice Department withdrew following bipartisan criticism.
The decision was made shortly before Acting Attorney General Todd Blanche's Senate confirmation hearing, where he is expected to face questions regarding the settlement. Williams noted that the lawsuit did not present a genuine legal dispute, as Trump controlled the agencies defending the case.
She referred Blanche and Associate Attorney General Stanley Woodward to their respective bar associations for potential disciplinary action and barred America First Legal Vice President Daniel Epstein from appearing in her court for one year. A spokesperson for Trump's legal team defended the lawsuit, claiming that the IRS failed to protect the President's confidential tax information after a contractor leaked tax returns to news organizations.