Former judges seek to reopen Trump IRS lawsuit over alleged court fraud

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Judges seek Trump IRS case

Highlights

Thirty-five former federal judges filed a motion challenging Judge Kathleen Williams' dismissal of Trump's $10 billion IRS lawsuit, citing potential court deception during the process.
The DOJ settlement established a $1.776 billion Anti-Weaponization Fund and later included an addendum shielding plaintiffs and affiliates from IRS enforcement on past returns.
Former judges seek relief under Rule 60 to reopen the case, alleging the settlement notice omitted material facts and may constitute fraud on the court.

Court filing challenges dismissal process

As reported by CNBC, 35 former federal judges argue in a Wednesday court filing that U.S. District Judge Kathleen Williams should reopen the case to investigate whether "a fraud occurred" and whether the court was deceived during the dismissal process.

Trump, his two eldest sons and the Trump Organization dropped the $10 billion lawsuit on May 18. The case stemmed from leaks of their tax information by a former IRS employee in 2019 and 2020, and Williams then dismissed it with prejudice while noting that the move canceled an upcoming deadline tied to her scrutiny of the matter.

The retired judges say the plaintiffs' notice made no mention of a settlement even though the DOJ announced one the same day. They argue that this raises serious questions about the parties' candor toward the court and about possible manipulation of the judicial system.

Settlement terms draw broader legal scrutiny

The DOJ said the settlement includes creation of a $1.776 billion Anti-Weaponization Fund by the U.S. attorney general. A day later, the department disclosed an addendum that effectively shields the plaintiffs and certain affiliates from IRS enforcement related to past tax returns.

The former judges are seeking relief under Rule 60 of the Federal Rules of Civil Procedure, which they say allows Williams to reopen the case, or alternatively to do so on her own initiative. They want the judgment set aside so the court can resume examining whether there is a genuine underlying case or controversy, or whether the matter presented as settled is itself a fraud on the court.

Among the retired judges joining the filing is J. Michael Luttig, who previously testified before the House select committee investigating the Jan. 6, 2021, Capitol riot. The White House referred CNBC to the DOJ, which did not immediately respond to a request for comment, while the IRS and the Trump Organization also did not immediately comment.

In our earlier article on the Justice Department’s crackdown on fraud in federally funded benefits programs, we explained how the Civil Division is accelerating reviews of False Claims Act whistleblower complaints to identify stronger cases faster. We also noted the broader enforcement push behind the change, including new task forces and quicker referrals for potential prosecution, as part of a wider effort to tighten oversight of federal funds.

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