After filing a highly unusual lawsuit in which President Donald Trump sued his own administration’s Internal Revenue Service, he settled it through his acting attorney general — also his former personal lawyer, Todd Blanche — setting up a team of “volunteers” to dole out nearly $1.8 billion in taxpayer money out of what the Department of Justice calls “The Anti-Weaponization Fund.”
The president did so in a way to avoid any judicial oversight of his or the Justice Department’s actions. It is hard to imagine a situation more susceptible to fraud, grift, corruption and abuse. And the lawsuit itself was probably unconstitutional to begin with.
The lawsuit came after a report from The New York Times revealed that Trump had only paid $750 in federal income taxes in 2016 and 2017. The complaint against the IRS, filed by Trump, two of his adult sons and the Trump Organization, said the leak caused the plaintiffs “reputational and financial harm” and “public embarrassment.”
The judge assigned in the case, Kathleen Williams of the U.S. District Court for the Southern District of Florida, issued an order last month pointing out the strange nature of the lawsuit and expressing fear that it did not exhibit the type of “adversity” that is typically an essential ingredient of any federal lawsuit, a requirement of the U.S. Constitution.
Citing relevant and consistent precedent on this point, she wrote that a “key characteristic of the case or controversy requirement” in the Constitution “is the existence of adverseness, or ‘a dispute between parties who face each other in an adversary proceeding.’” She noted that there must be an “‘an honest and actual antagonistic assertion of rights by one individual against another, which is neither feigned nor collusive.’” She added: “It is unclear to this Court whether the Parties are sufficiently adverse to each other so as to satisfy Article III’s case or controversy requirement.”
Even the president noted the strangeness of the situation. In a conversation with the press in late January on Air Force One, he said the situation was “very interesting,” adding, “I’ll have to work out a settlement with myself.”
Given this “interesting” situation, Judge Williams asked the parties to submit their written arguments to the court by May 20, 2026, and indicated she would hold a hearing on this question on May 27, 2026.
It is hard to imagine a situation more prone to abuse and collusion, which is precisely why this is a case that should have been tossed out of court in the first place.
Instead of facing the music in Judge Williams’ courtroom, the plaintiff-president has moved for voluntary dismissal of the lawsuit altogether, a maneuver designed to avoid the type of judicial oversight, review and approval by the judge, which most settlement agreements in court require.
Whether this means the settlement will not face legal challenge remains to be seen. For now, the administration appears poised to create a nearly $1.8 billion slush fund set up by the administration and capitalized with taxpayer dollars. It will be administered by individuals chosen only by the administration, outside any sort of review. There is also nothing in the order setting up the fund, signed by the acting attorney general, that provides standards for distributing the funds, a process by which the fund might disburse them or who is entitled to seek them.
It is hard to imagine a situation more prone to abuse and collusion, which is precisely why this is a case that should have been tossed out of court in the first place. But the administration, and the president, appear to have figured out a way to avoid that outcome, in the nick of time.
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