A federal judge found that a $10 billion lawsuit against the Internal Revenue Service was brought for an improper purpose and that no genuine adversary stood on the other side. On September 29 the Eleventh Circuit declined to pause the resulting sanctions while the appeal proceeds. Whatever one thinks of the President, the structural question is one conservatives have asked of other administrations: what happens to the rule of law when the executive branch sits on both sides of the table?
On January 29, 2026, President Donald Trump, his sons Donald Jr. and Eric, and the Trump Organization sued the IRS and the Treasury Department in the Southern District of Florida, seeking $10 billion over the unlawful disclosure of their tax information by a former IRS contractor, according to the case timeline compiled on Wikipedia. The underlying wrong was real. The contractor, Charles Littlejohn, pleaded guilty in 2023 and was sentenced to five years in prison for leaking returns to the press. No serious person disputes that the leak was a crime or that taxpayer privacy is worth protecting.
The question the court took up was different: whether the lawsuit itself was a genuine legal dispute. On July 13, Judge Kathleen M. Williams said it was not. In Trump v. Internal Revenue Service, No. 26-cv-20609-KMW (S.D. Fla.), Doc. 106, she found the suit was filed for an “improper purpose” and described it as “an attempt to use the Court to provide some legitimacy to an agreement to confer immunity to people and entities affiliated with the President,” as quoted by Democracy Docket and Forbes. A note on sourcing: the page-cited passages below come from the opinion itself, which RSN could review only through page 43 of its 56 pages. The sanctions, which appear in the closing pages, are taken from press accounts and should be checked against the order.
The Timeline the Court Found Telling
According to the opinion as summarized, the suit was settled and dismissed on May 18, 2026, 109 days after filing, with no litigation on the merits in between. The Justice Department announced a $1.776 billion “Anti-Weaponization Fund” the same day, and the next day Acting Attorney General Todd Blanche issued an order ending IRS audits of the President, his family, and their businesses, per the same timeline. The fund component later drew bipartisan opposition and was abandoned; the audit protections, according to that timeline, remained in place as of June.
Former federal judges and other non-parties asked the court to revisit the dismissal. Judge Williams reopened the matter and, in the July 13 order, concluded the case never presented a real controversy.
The Constitutional Problem: A Plaintiff Who Controls the Defendant
The core of the opinion is not partisan. It rests on Article III. Federal courts decide actual disputes between adverse parties; they do not issue judgments that parties arranged in advance. The Supreme Court has said so since at least Muskrat v. United States (1911), and the opinion, citing precedent, states that courts “do not engage in the academic pastime of rendering judgments in favor of persons against themselves” (p. 16).
The court applied that doctrine to a distinctive fact: the President is both the plaintiff and the head of the executive branch that supervises the defendants. As summarized, the opinion reasons that the President’s power to appoint and remove officers gives him control over the IRS and Treasury, and it points to an executive order barring executive-branch employees from advancing legal positions that contravene the President’s. It also records that “no attorney appeared on Defendants’ behalf, challenged Plaintiffs’ actions, or justified the United States’ position in any way” (p. 22). The opening of the opinion calls the case “the very definition of sui generis” (p. 2).
This is the point that should interest conservatives regardless of party loyalty. The movement’s constitutional tradition insists on separation of powers, on courts as neutral arbiters, and on guarding the Treasury against self-dealing. A suit in which the claimant effectively controls the payer, and in which the proposed outcome includes public money and audit immunity, tests all three. The principle would apply identically if a different President’s family had filed the same case.
The Lawyers and the Conflict Question
The opinion also addressed the Justice Department officials who signed for the government. It states that before joining the department, Blanche “served as President Trump’s personal criminal defense attorney in several high-profile matters,” and that Associate Attorney General Stanley Woodward represented individuals charged over January 6 (p. 31). It cites Rule 4-1.11 of the Rules Regulating the Florida Bar, which governs conflicts for former and current government lawyers (p. 32).
Press accounts report the sanctions as follows: Trump’s lawyer Alejandro Brito was referred to the Florida Bar, co-counsel Daniel Epstein was barred from appearing in the Southern District of Florida for a year, and copies of the opinion went to the bar authorities handling complaints already pending against Blanche and Woodward, per Law Dork and VisaVerge. The court also restricted the parties from invoking the purported settlement in other proceedings. A referral is not a finding of professional misconduct. Those determinations belong to the bar authorities, and no discipline has been reported.
The Other Side’s Case
Fairness requires stating what the plaintiffs say. According to VisaVerge’s account of their emergency filing, Trump’s lawyers call the order an “extraordinary abuse” of judicial authority and the restriction on discussing the settlement an unconstitutional gag order that burdens the President’s ability to speak in his official capacity. Their public response to the July ruling, per Forbes, did not engage the findings directly. It criticized the IRS for failing to protect the returns and said the President “continues to hold those who wrong America and Americans accountable.”
Those arguments have a legal basis worth taking seriously. A narrow restriction on how a party may describe a settlement raises genuine First Amendment and Article II questions, and the district court is not the final word. Whether a district court may reopen a case the parties had closed, on the motion of non-parties, is likewise a procedural question the appeal may resolve.
The Appeals Court Declines to Intervene, for Now
On September 29, the Eleventh Circuit denied the request to stay the sanctions pending appeal (No. 26-12692), reported by U.S. News and Law Commentary. The latter reports no judge dissented. As quoted by Courts Cast, the panel said the appellants “had not made the required strong showing that they were likely to overturn a narrow restriction on how they could describe or invoke the parties’ agreement in legal proceedings,” and had “offered no evidence to explain their conduct or rebut those findings at this stage.” The same account says the Florida Bar referral was treated as not yet a final order.
This is a stay ruling, not a decision on the merits. The appeal continues, and the panel’s language is explicitly provisional.
What It Reveals
RSN has examined how institutions fail when those who run them cannot, or will not, hold themselves to account: in a Chicago grand-jury process, in a Philadelphia prosecutor’s office, and in the weakening of Justice Department independence. This case belongs in the same file, with a distinction: here the check that operated was the judiciary. The same judiciary has been the target of a Justice Department misconduct complaint in Minnesota, and the two stories should be read together. Courts that rule against the government are accused of overreach; courts that rule for it are accused of deference. The test is whether the legal reasoning holds up on appeal.
Established by the record: the suit’s filing and dismissal dates; the court’s July 13 findings of improper purpose and lack of adversity; the Eleventh Circuit’s September 29 stay denial. Reported but not independently verified here: the specific sanctions, which come from press accounts. Contested: whether the sanctions and the restriction on discussing the settlement survive appeal. Unknown: the merits ruling, any bar discipline, and whether the audit-immunity order will itself be tested in court.
The durable lesson does not depend on who wins. A government that can sue itself, settle with itself, and ask a court to bless the result has no adversary, and a court without an adversary has no case. Conservatives who spent years objecting to sue-and-settle arrangements that bypassed Congress and the courts have a reason to say so here too.
Sources: Order, Trump v. IRS, No. 26-cv-20609-KMW (S.D. Fla. July 13, 2026), Doc. 106; Law Dork; Democracy Docket; Forbes; U.S. News; Law Commentary; Courts Cast; VisaVerge; Wikipedia timeline.