Trump appeals $10B IRS lawsuit dismissal after judge cites bad faith
Trump appeals the dismissal of a $10 billion IRS lawsuit, which a federal judge ruled was filed in bad faith. The ruling also ended a $1.776 billion lawfare fund proposal, complicating the confirmation of attorney general nominee Todd Blanche and resulting in sanctions for two attorneys.

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President Donald Trump, alongside two adult sons, the Trump Organization, and two attorneys, filed an appeal on Friday against U.S. District Judge Kathleen Williams’ July 13 order dismissing a $10 billion lawsuit against the Internal Revenue Service. The plaintiffs are challenging the ruling before the 11th U.S. Circuit Court of Appeals, contesting the judge’s conclusion that the litigation was filed in bad faith to secure judicial legitimacy for a settlement lacking legal foundation.
The dispute centers on a proposed settlement that would have exchanged the dismissal of the lawsuit for the creation of a $1.776 billion fund by the Justice Department for individuals claiming victimization by government "lawfare." Judge Williams found that the plaintiffs allegedly used the litigation to access taxpayer funds and gain protections from certain IRS enforcement actions regarding past federal tax returns of Trump, his family members, and related entities.
Implications for Political Appointments
The controversy surrounding the scrapped fund has extended into legislative proceedings, impacting the confirmation process for Todd Blanche, Trump’s nominee for attorney general. Several Republican lawmakers in the Senate have withheld support for Blanche’s nomination, citing concerns over the proposed settlement structure. Trump addressed the situation on Truth Social, stating he believes victims of government abuse should be compensated for ruined lives, despite the fund being declared "dead" during a Cabinet meeting at Camp David.
Legal Sanctions and Defense
In addition to dismissing the core claims, Judge Williams imposed nonmonetary sanctions on Trump’s legal team. Attorney Alejandro Brito was referred to the Florida Bar for possible disciplinary action, while attorney Daniel Epstein was barred from appearing in the Southern District of Florida for one year. The Justice Department rejected the judge’s characterization, asserting there was no collusion and accusing Williams of disregarding decades of legal precedent.
Key Figures and Actions
| Entity/Person | Role/Action | Status |
|---|---|---|
| Donald Trump | Plaintiff / President | Filed appeal |
| Kathleen Williams | U.S. District Judge | Dismissed case; imposed sanctions |
| Alejandro Brito | Attorney | Referred to Florida Bar |
| Daniel Epstein | Attorney | Banned from SD Florida (1 year) |
| Todd Blanche | AG Nominee | Confirmation stalled |
What the Numbers Show
The financial scale of the dispute highlights the high stakes involved in executive branch litigation strategies. The $10 billion lawsuit value contrasts sharply with the $1.776 billion proposed compensation fund, suggesting the litigation may have served as leverage for a significantly smaller financial outcome rather than a direct claim for damages. The dismissal underscores judicial scrutiny on settlements involving taxpayer funds without clear statutory backing.
How might the 11th Circuit Court of Appeals' ruling on this appeal influence future executive branch strategies for leveraging litigation to secure taxpayer-funded settlements?
Will the stalled confirmation of Todd Blanche as Attorney General signal a broader shift in Senate Republican willingness to support nominees linked to controversial legal settlements?
What are the long-term career implications for attorneys like Alejandro Brito and Daniel Epstein following these sanctions, and will this deter other lawyers from representing high-profile political figures in similar cases?

























