President Donald Trump speaks during a lunch with African leaders in the State Dining Room of the White House, Wednesday, July 9, 2025, in Washington (AP Photo/Evan Vucci).
A group of state attorneys general is urging the judge who handled President Donald Trump’s now-resolved lawsuit against the IRS to take further action over what they describe as a deeply flawed case and a subsequent “anti-weaponization fund.” In a court filing Tuesday, they argued the court should “rectify the fraud perpetrated” and “deter future misconduct.”
The argument came in a 19-page amicus brief filed by top prosecutors from California and 22 other states, who said the case at the center of the dispute is “no ordinary lawsuit.”
“As the Court has already observed, the circumstances of this case, including the potential lack of adversity between the parties, are highly unusual,” the filing states. “[T]he Court was correct to raise jurisdictional questions, and the ‘settlement’ that purports to resolve the case is further evidence that the litigation has been colored by fraud from the beginning.”
Trump’s initial lawsuit against the IRS was filed in January in the Southern District of Florida. By mid-May, the matter had been dismissed at the plaintiff’s request, with Trump instead pursuing a publicly funded arrangement that would provide payments to pro-Trump allies and others in similar positions.
U.S. District Judge Kathleen Williams, an appointee of former President Barack Obama, raised several concerns about the proceedings in her order closing the case. Separately, at least four other lawsuits or claims have been brought in an effort to block the arrangement, which opponents have characterized as a “slush fund.”
The California-led filing now appears to be at least the fifth challenge to the proposed settlement. The deal has drawn additional scrutiny because of language that critics say would prevent the IRS from auditing past or current tax returns belonging to Trump, his sons or the Trump Organization.
According to the attorneys general, the case’s full arc — from its filing to a proposed $1.776 billion payout — shows the settlement was not handled in a legitimate or transparent manner.
“That ‘settlement’ is not a reasonable resolution of the claims asserted here,” the filing goes on. “Instead, it is a mechanism to enrich President Trump’s political allies and attempt to immunize the Trump family from legitimate law enforcement, all at the expense of American taxpayers.”
The amicus brief points to the behavior of the parties even before the settlement was reached to challenge what eventually transpired.
“The Court recognized that the parties’ likely lack of adversity raised a threshold jurisdictional question,” the filing continues, referring to initial concerns raised by Williams about the fact that Trump was suing an agency he controlled via political appointments.
In service of those concerns, the court ordered “the parties to brief the question of whether a case or controversy existed in this matter” and directed those motions to be filed by May 20, the amici note.
Those motions, in the end, never came. The attorneys general frame the lack of such motions as evidence the settlement was untoward.
“Rather than answer the Court’s question, the parties evaded it,” the filing goes on. “On May 18, two days before the briefs were due, Plaintiffs voluntarily dismissed their claims with prejudice.”
The amicus brief muses about how the DOJ could have defended the IRS against the lawsuit, instead of quickly settling. From the filing:
[DOJ] refused to assert several robust substantive defenses to the President’s claims, including defenses the IRS previously asserted in litigation stemming from disclosure of other taxpayers’ information by the same federal contractor who allegedly leaked the President’s information. Nor did the Department seek to dismiss the case as time barred under [the relevant law], despite it being a straightforward argument. The Department similarly failed to make any arguments concerning the limits on statutory damages, the plain defects with the Plaintiffs’ Privacy Act claims, or the lack of any waiver of sovereign immunity[.]
The amici also take issue with exactly how the parties settled.
In deciding to end the lawsuit, the DOJ agreed to create the anti-weaponization fund out of the Department of the Treasury’s Judgment Fund, which is a permanent outlay created by Congress.
The filing argues the settlement terms “lay bare an attempted end-run around constitutional limits on executive authority.”
“This Court should not countenance such a scheme,” the brief continues. “Here, that abuse would open a backdoor through which the President could shovel public funds to his friends and family.”
To hear the amici tell it, the controversy is about basic principles of law, justice, and popular consent for governance.
“Were the parties to succeed in their scheme, public trust in the judicial process would suffer,” the brief says. “Corruption, self-dealing, deception, and fraud, in the service of skirting constitutional limits and enriching the President, does grave damage to public trust in the rule of law and in the judicial process.”
The amici summarize by insisting the settlement is an effort to “commandeer the machinery of the judicial system to skirt constitutional limits on executive power, with the goal of enriching President Trump, his family, and his allies” and that “[t]he Court should not countenance such malfeasance.”
