Former Federal Judges Ask Court to Reopen Trump Administration IRS Lawsuit and Scrutinize Payout Fund

On May 27, 2026, a bipartisan coalition of 35 former federal judges filed a motion in the U.S. District Court for the Southern District of Florida asking Judge Kathleen M. Williams to reopen President Donald Trump's voluntarily dismissed $10 billion lawsuit against the Internal Revenue Service [1]. The former jurists allege that the simultaneous creation of a $1.776 billion "Anti-Weaponization Fund" — announced by the Department of Justice just hours after Trump dropped the suit — amounts to a fraud perpetrated on the court [2].

The motion represents one of the most extraordinary interventions by former members of the federal judiciary in a sitting president's legal affairs. It also raises fundamental questions about whether the executive branch can use a contrived lawsuit to unlock nearly $1.8 billion in taxpayer funds, bypass congressional appropriations, and shield itself from IRS enforcement — all without judicial review.

The Lawsuit That Started It All

On January 29, 2026, Trump, his sons Donald Jr. and Eric, and the Trump Organization filed a $10 billion lawsuit against the IRS and the Department of the Treasury [3]. The complaint alleged that the agencies failed to safeguard confidential tax information from Charles E. Littlejohn, a former IRS contractor sentenced to five years in prison in 2024 for leaking tax records of Trump and thousands of other wealthy Americans to The New York Times and ProPublica [4].

The lawsuit immediately raised constitutional red flags. Trump was, in effect, suing agencies under his own executive authority — acting as both plaintiff and the chief executive overseeing the defendants. On April 24, Judge Williams issued a sua sponte order redirecting proceedings to a threshold jurisdictional question, noting the "unique dynamic" of a sitting president suing agencies "subject to his direction" [5]. A court-appointed group of independent lawyers noted in a May 14 filing that there was "reason to believe that the President is, in fact, exercising his control over the Defendants" [6].

Williams set a May 20 deadline for both sides to justify why the case should proceed. Two days before that deadline, on May 18, Trump filed a notice of voluntary dismissal with prejudice [5].

The Settlement That Wasn't Filed in Court

What happened next is the crux of the former judges' fraud allegation.

Trump's notice of voluntary dismissal made no mention of a settlement [2]. But within hours of the filing, the Department of Justice publicly announced a "settlement agreement" under which Attorney General Todd Blanche would establish a $1.776 billion "Anti-Weaponization Fund" [7]. The following day, the DOJ disclosed an addendum to the settlement that "forever barred and precluded" the IRS from examining or prosecuting Trump, his sons, the Trump Organization, and their affiliates for any current or past tax issues [8].

None of these terms were presented to Judge Williams. The settlement was never filed with the court. No judicial review was sought or obtained [2].

"The Court was deceived," the former judges wrote. "Despite Plaintiffs not having mentioned any settlement in their Notice, the [DOJ] publicly announced a 'settlement' of this action shortly after Plaintiffs filed their dismissal" [1].

Inside the $1.776 Billion Fund

The Anti-Weaponization Fund draws its money from the federal Judgment Fund, a permanent Treasury appropriation typically used to pay court-ordered judgments and settlements against the United States [9]. The fund's stated purpose is to "provide a systematic process to hear and redress claims of others who suffered weaponization and lawfare" [7].

A five-member commission appointed by the Attorney General oversees the fund, with one member selected "in consultation with congressional leadership." The commission has authority to issue both monetary awards and formal apologies. Claims processing must conclude by December 15, 2028 [9].

Critically, the fund has no public disclosure requirements for recipients. Trump retains the authority to remove commission members without cause. And no judicial oversight governs how the funds are allocated [10].

The DOJ stated there are "no partisan requirements" for filing a claim [7]. But detailed eligibility criteria remain unreleased. Acting Attorney General Blanche — who previously served as Trump's personal defense attorney — declined to rule out that January 6 defendants could receive payments, telling senators that "anybody in this country can apply" [11].

Source: DOJ, Congressional Research Service

Data as of May 28, 2026CSV

The fund dwarfs prior federal settlement mechanisms. The Keepseagle v. Vilsack settlement, which compensated Native American farmers for USDA discrimination, totaled $680 million. The Central Park Five settlement with New York City was $41 million. A 1998 Clinton-era settlement for Japanese Latin American internees paid $5,000 each from the Judgment Fund [12]. The Anti-Weaponization Fund, at $1.776 billion, is more than double all of those combined — and unlike each of them, it was never approved by a court.

Who Wants the Money

The rush to file claims has been immediate. Attorney Peter Ticktin has indicated that approximately 400 of his January 6 clients plan to apply [11]. Specific individuals who have publicly expressed intent to seek payments include:

• Enrique Tarrio, former Proud Boys leader sentenced to the longest January 6-related prison term before receiving a presidential pardon, whose attorney said he would "pursue all relief and remedies available" [11]
• Mike Lindell, the MyPillow CEO, who claims his company lost $400 million due to "election-related lawsuits" and government investigations [11]
• Michael Caputo, former HHS spokesperson, requesting $2.7 million [11]
• John Eastman, the conservative attorney involved in efforts to overturn the 2020 election results, who expressed interest in applying [11]
• Adam Johnson, convicted for carrying Speaker Pelosi's lectern during the Capitol breach, estimating $255,000 in expenses [11]

Michael Cohen, Trump's former personal attorney who was himself prosecuted and imprisoned, has also expressed interest — an ironic twist given his falling out with the president [11].

The Former Judges' Legal Argument

The 35 former judges invoke Rule 60 of the Federal Rules of Civil Procedure, which allows courts to reopen final judgments [1]. Specifically, they cite Rule 60(d)(3), which preserves the court's inherent power to "set aside a judgment for fraud on the court" — a provision with no time limit [13].

Their argument rests on several claims: that the Trump legal team affirmatively concealed the settlement from Judge Williams; that the DOJ and the plaintiffs colluded to manufacture a "settlement" of a case in which the government never faced a realistic prospect of losing; and that the arrangement was designed to circumvent congressional appropriations authority [2].

"The purported 'settlement' raises profound questions about the parties' candor toward the Court and manipulation of the judicial system, which threatens to undermine confidence in the administration of justice," the filing states [1].

Among the signatories is former U.S. Circuit Judge J. Michael Luttig, a prominent conservative jurist appointed by President George H.W. Bush who previously served as an associate in the White House Counsel's office under President Reagan [1]. Luttig became widely known for his testimony before the House January 6 Select Committee. The group is described as bipartisan, including judges appointed by both Republican and Democratic presidents [14].

A key legal precedent supporting their approach is Hazel-Atlas Glass Co. v. Hartford-Empire Co. (1944), in which the Supreme Court held that courts have inherent authority to vacate judgments obtained through fraud [13]. Case law has also established that non-parties may raise fraud-on-the-court challenges under Rule 60 even when their interests are not directly affected by the judgment [2].

The Administration's Defense

Defenders of the fund — who have been few in number — have offered two principal arguments [15].

First, Acting Attorney General Blanche compared the fund to prior settlement mechanisms, particularly Keepseagle v. Vilsack. "This was done during the Obama administration, something almost identical in structure," Blanche told senators, while acknowledging: "It is true that this is unusual. That is true, but it is not unprecedented" [9].

Legal scholars have sharply contested this comparison. Adam Zimmerman of USC Gould School of Law said: "I don't even think we have a word for how unprecedented this is. This is in a totally different solar system than any past government settlement" [9]. The key distinction: in Keepseagle and the Central Park Five case, courts approved the settlements. Here, no court has reviewed the terms [9].

Second, some conservative commentators have argued that the fund, while problematic, follows patterns established by Democratic administrations. Dan McLaughlin of National Review wrote that the fund "looks a lot like a collusive operation to create a slush fund to pay off friends and political allies" but added that Trump was "really just taking another page from the left's playbook" [15]. This framing concedes the criticism while distributing blame.

Senate Judiciary Chairman Chuck Grassley offered a more limited defense: "I think that there's a unanimous understanding that the federal government shouldn't be used for political weaponization against your political enemies, whether they're Republican or Democrat" [15]. But even Republican senators have expressed discomfort with the fund's scope and lack of oversight [15].

The Steelman Against Reopening

The strongest legal argument against the former judges' motion is straightforward: Trump voluntarily dismissed his own case with prejudice. The settlement agreement was executed outside the courtroom. No court order was entered. Under this view, there is no "judgment" for Rule 60 to vacate.

Critics of the intervention argue that former judges — who are now private citizens — are attempting to use the judiciary to second-guess executive branch settlement authority, potentially crossing a separation-of-powers line. The executive branch has broad authority to settle litigation, and the Judgment Fund exists precisely to pay such settlements without requiring specific congressional appropriations [12].

There is also a standing question. The former judges are not parties to the case, and their interests are not directly financial. While case law permits non-party fraud-on-the-court motions, courts have historically been cautious about allowing outsiders to reopen closed cases [13].

What Internal Government Lawyers Thought

The settlement has not sat well with career government attorneys. Lawyers at the IRS believed the DOJ could have successfully defended the government against Trump's lawsuit [16]. Several former government tax officials — including John Koskinen, former IRS Commissioner, and Kathryn Keneally, former Assistant Attorney General for the Tax Division — argued in February 2026 that the case should be placed on hold until Trump leaves office in January 2029 [16].

Brandon DeBot, policy director of the Tax Law Center at NYU School of Law, called the settlement addendum a "breathtaking abuse of the tax and legal system," arguing the DOJ lacks authority to offer the broad tax enforcement protections it promised [4]. Charles Rettig, a former IRS Commissioner appointed by Trump himself, has described the settlement as setting a "dangerous precedent" [17].

What Remedies Are Actually Available

If Judge Williams grants the motion and reopens the case, several remedies are theoretically available — though each faces practical obstacles.

Vacating the dismissal would reopen the lawsuit, but Trump dismissed with prejudice, meaning he cannot refile. The more relevant effect would be subjecting the settlement to judicial review.

Injunction on fund disbursements could halt payments while the court examines the settlement's legality. This would be the most immediate and impactful remedy.

Referral for criminal investigation is possible if the court finds evidence of fraud. The Anti-Deficiency Act makes it a criminal offense for officials to spend government funds without proper appropriation [12]. Separately, 26 U.S.C. § 7217 criminalizes executive interference with IRS investigations — potentially relevant to the addendum barring IRS audits of Trump [12].

Clawback of disbursed funds is the most difficult remedy. If payments have already been made, recovering them from individual recipients would require separate legal proceedings.

The realistic timeline is uncertain. Federal docket backlogs mean that even if Williams acts quickly on the motion, any resulting proceedings would take months. The fund's claims deadline of December 15, 2028, creates urgency — as the Lawfare analysis noted, the fund could be "spent before any bill to regulate the AWF is even circulated on the Hill" [12].

The Larger Constitutional Question

At its core, this dispute is about whether the executive branch can manufacture a lawsuit against itself, dismiss it on terms favorable to the president, and use the resulting "settlement" to create a multi-billion-dollar fund outside congressional control — all while immunizing the president from tax enforcement.

Ninety-three members of the U.S. House of Representatives have filed their own amicus brief arguing that the suit never presented a genuine "case or controversy" as required by Article III of the Constitution, because Trump holds executive authority over the defendants [6]. Citizens for Responsibility and Ethics in Washington (CREW) and Public Citizen have filed separate challenges [6].

The former judges' motion adds institutional weight to these objections. These are not partisan operatives or advocacy organizations; they are retired members of the judiciary who, as their filing states, "have dedicated their professional lives to the administration of justice" [2]. Their willingness to take the extraordinary step of asking a colleague to reopen a case — alleging fraud by the President and his own Justice Department — signals how far outside normal legal boundaries this arrangement has traveled.

Whether Judge Williams agrees remains to be seen. But the filing ensures that the $1.776 billion question will not go unanswered quietly.