The president filed a notice of appeal Friday to the Eleventh Circuit challenging a July 13 order that found his $10 billion lawsuit against the IRS was brought in bad faith to legitimize a $1.776 billion settlement fund and a tax-audit carve-out for his family. Judge Kathleen Williams of the Southern District of Florida ruled the case was "improperly employed" to extract taxpayer money and enforcement immunity by leveraging control over the Justice Department. The appeal does not automatically stay the non-monetary sanctions, which include a Florida Bar referral for attorney Alejandro Brito and a one-year bar on Daniel Epstein appearing in the district.
The settlement that wasn't
The agreement Trump sought to validate would have created a $1.776 billion "lawfare" fund administered by the DOJ to pay individuals claiming victimization by federal law enforcement. In exchange, Trump and his co-plaintiffs, his two adult sons, the Trump Organization, and two attorneys, would drop the suit. The deal also contained a provision barring the IRS from using past Trump family tax returns in any enforcement action. Williams wrote that the plaintiffs used the lawsuit to "justify a particular award ... access to taxpayer funds and exemption from audits and other investigations." Her order stopped short of voiding the private agreement, noting enforceability "is not before the Court."
The fund is dead, but the nomination hangs
Trump told a Camp David Cabinet meeting Friday that the fund had been scrapped. "The fund is dead, but, you know, I wish it weren't," he said. His attorney general nominee, Todd Blanche, remains stalled in the Senate. Republican holdouts led by Sen. Thom Tillis of North Carolina say they have not received written assurance the fund cannot be resurrected. Blanche previously declined to rule out payments to Jan. 6 defendants during confirmation testimony. Trump pardoned virtually all Capitol rioters and posted on Truth Social Friday defending the fund as compensation for "victims of government abuse."
What the sanctions actually do
Williams referred Brito to the Florida Bar for potential discipline and barred Epstein from the Southern District of Florida for one year. She also prohibited all parties from citing the settlement agreement as evidence a settlement was reached in the case. The order imposes no fines and does not unwind the private contract between the sides. Trump's legal team issued a statement after the appeal repeating that the IRS leak was wrongful and that the president "continues to hold those who wrong America and Americans accountable." The Eleventh Circuit docket shows no briefing schedule yet.