US judge voids Donald Trump's $1.8bn settlement with IRS that gave him immunity from tax audits

A significant story is unfolding on the international scene. US judge voids Donald Trump's $1. 8bn settlement with IRS that gave him immunity from tax audits Image source, Getty ImagesImage caption, Democrats and some Republicans criticised the creation of an "anti-weaponisation" fund following the initial settlement. ByBernd Debusmann JrWhite House reporter Published13 July 2026, 19:25 BSTUpdated 20 minutes agoA US judge has voided a legal agreement between President Donald Trump and federal agencies that granted him immunity from tax audits and allowed his administration to create a since-abandoned $1.

3bn) "anti-weaponisation" fund. The fund, intended to compensate individuals claiming they were unfairly targeted by the government, was unveiled in May in exchange for Trump dropping his personal $10bn lawsuit against the Internal Revenue Service (IRS). But on Monday, US District Judge Kathleen Williams said the suit was filed for an improper purpose.

The Details

She also referred a Trump lawyer to state authorities to determine whether ethics rules were violated and disciplinary action required. In the ruling, Williams cast Trump's lawsuit - which he, two of his sons and the Trump Organization filed in 2026 - as far from a dispute between two opposing sides. Instead, she described it as more of an action carried out by lawyers with ties to Trump and those who claimed to have been government targets.

Williams wrote the lawsuit "was never about a party seeking judicial resolution of a legal issue or a factual dispute" between Trump and the IRS, which he controls as president. She also described the settlement as a bid to "provide some legitimacy to an agreement to confer immunity to people and entities affiliated with the President and to earmark billions of dollars from American taxpayers to redress grievances not defined in the law. " The decision also prevents those involved with the case - including Trump and his sons - from referring to the settlement or citing its terms in future legal proceedings.

This, in turn, could mean that the IRS can move forward with future audits into Trump's tax claims. In the initial lawsuit, Trump claimed that nothing had been done to prevent the leak of his private tax information by a former IRS contractor, Charles Littlejohn. Just before the 2020 presidential election, which Trump lost, the leaked information formed the basis of a New York Times investigation that revealed he paid only $750 in federal income taxes the year he won his presidency in 2016, and no taxes at all in 10 of the previous 15 years.

"President Trump did not pursue his claims until he once again occupied the White House and had appointed his former lawyer, and the former lawyer of persons who are putative beneficiaries of the 'Anti-Weaponization Fund' to prominent positions in the DOJ," Williams wrote, referring to the Department of Justice. "These officials then negotiated on behalf of the United States, with his current lawyers, including his former White House Counsel to reach a 'settlement.

The story has become one of the most prominent items on the global agenda.