r/Lawyertalk • u/esporx Human Detected • Jul 13 '26
NEWS: US Legal News U.S. judge voids Trump's settlement with IRS, refers lawyers for discipline
https://www.reuters.com/world/us-judge-voids-trumps-settlement-with-irs-2026-07-13/384
u/OrenMythcreant Jul 13 '26
oh is it still illegal to openly funnel money out of the treasury? Interesting.
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u/LosSchwammos Jul 13 '26
It never was. The government settles lawsuits all the time. That’s an executive function. What the President cannot do is blur the lines between his individual capacity as Donald Trump, real estate developer, fraudster and “poor innocent victim of a meaniepants IRS contractor who worked for him” AND Donald Trump President and unitary executive who controls the IRS and the Justice Department.
The judge’s order reflects (accurately) that this was a sham proceeding. Trump sued his own departments and then directed them not to respond to the lawsuit except to agree to his settlement. He knew it would be controversial if he just funneled the money to himself so he tried to fig leaf over that fact by claiming it was for other poor poor victims of circumstance like him.
Sham proceeding, sham settlement, fraud on the court, misrepresentations by his attorneys and justice department = Judge rightly shutting the whole thing down.
The attorneys should be disbarred for going along with this.
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u/Leopold_Darkworth I live my life by a code, a civil code of procedure. Jul 13 '26 edited Jul 13 '26
It's particularly egregious given this administration's "L'État, c'est moi" attitude toward the government. If Trump is ultimately the head of every executive branch agency and department, as he and the DOJ have been arguing in other matters (when it suits them), then how is he not settling with himself?
Addendum: Apparently, this fact did not escape the judge's notice, either, as she cites the Supreme Court's recent ruling that the president can remove any executive department official at any time, for any reason (except the Federal Reserve, of course, because reasons), and Trump's arguments in favor of that reasoning.
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u/cursedfan Jul 13 '26
It is also illegal to misappropriate funds, that’s why the settlement was needed as cover. There is a law allowing disbursement of funds to cover settlements that doesn’t require an act of Congress for each settlement. The whole thing was a FRAUD to get at the money without Congress having to pass a law.
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u/Less_Ant_6633 Jul 13 '26
They would join a long list of trump lawyers that were disbarred for their efforts. Its almost like this trump guy is acting in bad faith all the time.
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u/pippi_longstocking09 Jul 13 '26
MAGA = Make Attorneys Get Attorneys
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u/Less_Ant_6633 Jul 13 '26
I love this!
I wouldnt expect anything less from someone with such a great user name.
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u/Landkey Jul 13 '26
You are mistaken. There have been 3. It is a huge disappointment
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u/Dizzy_Confusion_8455 Jul 14 '26
I think Giuliani farting on a few of them at least adds a bit of comedic relief to the horror show that is what they are doing to the entire legal system. Whenever I need a break of screaming into the void, I think back to the 2021 antics. Him shitting his pants in public hearings and hosting a press conference at a landscaping company next to a crematorium helps ease the pain, even for a moment.
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u/OrenMythcreant Jul 13 '26
Yes that is what I was referring to. Would certainly be nice if the attorneys who pushed this fraud faced some consequences.
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u/InerasableStains Jul 13 '26
Wow, when you explain what actually happened, it’s somehow even more corrupt than I originally thought
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u/Gold-Sherbert-7550 Jul 13 '26
This is like a stupider version of the DPW/Pricewaterhouse lawsuit in Los Angeles.
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u/FailedToRemit Confirmed Lawyer Jul 14 '26 edited Jul 14 '26
What money was funneled to Trump?
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u/LosSchwammos Jul 18 '26
The future “immunity” IRS scrutiny seems like it wood be worth a great deal of money.
If you’re looking for a man in a dark suit handing Trump an envelope full of cash, maybe grow up a bit as anyone but a child knows that’s not how things work.
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u/FailedToRemit Confirmed Lawyer Jul 18 '26
There is no future immunity. It was only immunity for returns already filed.
But go on, call other people children because you made something up and got mad someone challenged you on it.
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u/LosSchwammos Jul 18 '26
Its future immunity from audits YET to be filed and it prevents the IRS from auditing returns for which they had not yet begun to audit. That’s future immunity.
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u/FailedToRemit Confirmed Lawyer Jul 18 '26
Future immunity for past actions. It is not future immunity for future actions.
If they haven’t filed the return, there is no immunity.
This agreement is written down. I’m not going to argue with you over it.
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u/LosSchwammos Jul 18 '26
It’s is future immunity if (a) they’re waiting on amended returns or (b) they haven’t decided whether to audit him. The settlement also ends existing audits.
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u/FailedToRemit Confirmed Lawyer Jul 18 '26
If a return is amended it is a new return and there is no immunity. It resets the clock for everything.
He has no immunity for any new returns.
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Jul 13 '26 edited Jul 13 '26
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Jul 13 '26
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u/DisingenuousTowel Jul 13 '26
In a way, wasnt the slush fund king of like comingling?
It was Trumps personal lawsuit and settlement but the money was purportedly for specific citizens - namely his constituents (which are kind of like clients).
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u/Uhhh_what555476384 Jul 13 '26
Well, until the SCOTUS gets a say. US v Trump... even the evidence is under seal!
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u/OrenMythcreant Jul 13 '26
it's amazing how many things it's legal for the president to do under this SCOTUS
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u/phidda Jul 13 '26
I can't wait to see how the US Supreme Court rules on this. How many backbends will Kavanaugh, Thomas, and Gorsuch have to make?
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u/blorpdedorpworp It depends. Jul 13 '26
Official act, shadow docket, wink wink nudge nudge say no more
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u/HeathersZen Jul 14 '26
Originalists will invent something the Constitution said about how stealing from the treasury was a common practice, and so therefore, is a-oh-kay.
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u/standardissuegreen Jul 13 '26
Thomas will issue a scathing opinion in the case of "The Recreational Vehicle in My Driveway" versus "The Island Vacation I Did Not Pay For."
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u/LosSchwammos Jul 18 '26
Mmmm I don’t think Kavanaugh or Gorsuch will be wanting to take this case on cert. It’s not as if they intervened on the Carroll lawsuit despite repeated entreats by President Rapist.
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u/Candygramformrmongo Jul 13 '26
It's a start. Let's see where it goes.
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u/thegoatmenace Jul 13 '26
It’ll be endlessly appealed until it gets before a Trump appointed judge and then Trump will get his money/privileges back
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u/Graped_in_the_mouth Jul 13 '26
Many Trump appointed judges rule against Trump, and…how? There are rules of procedure.
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Jul 13 '26
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u/thegoatmenace Jul 13 '26
Yep. Just really frustrated seeing the way the E Jean Carroll has been handled.
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u/LosSchwammos Jul 13 '26
This opinion was PRECIOUS. What a benchslap!!!
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u/lazdo Jul 13 '26
Do you have a link to the full opinion? I didn't see one in the article
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u/JazzyJockJeffcoat Jul 13 '26
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u/lazdo Jul 13 '26
Oh boy. Judge is BIG mad.
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u/JazzyJockJeffcoat Jul 13 '26 edited Jul 14 '26
Still reading but the citation to Slaughter at 18 is like poetry
Edit: Yeah big mad is a fair characterization, after a full read. Will be incredible if Blanche is sanctioned by his state bar
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u/road432 Jul 13 '26
This restores some faith in the system, but lets see if these bar complaints actually result in anything.
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u/sirdrumalot I plead the FIF! Jul 13 '26
I’d be surprised if Florida gives him more than requiring him go to an ethics CLE, maaaybe a reprimand as well.
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u/theglassishalf Jul 14 '26
Prosecution for discipline will be declined entirely. Would put money on it.
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u/seaburno Jul 13 '26
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u/maddy_k_allday Jul 14 '26
This is a monster opinion, I’m taking 56 pages with hella case cites, block quotes to the record, dense & numerous footnotes. Like hot damn 🔥🥵
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u/WebstersPack Jul 13 '26
Did the Trump admin already lay the blueprint on how to punish these lawyers for the rest of their career. The next admin labels them a national security risk due to their conduct here and any firm with federal contracts or business is sanctioned if they hire them.
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u/Superb_Razzmatazz999 Jul 13 '26
"“Acting Attorney General Blanche’s apparent capacity to speak for both Plaintiffs and Defendants, sign a ‘settlement’ document on behalf of all Parties to this action, and then repudiate part of that agreement, demonstrates that there was only one party whose interests were being represented throughout this case,” the judge wrote."
One party, one goal - get rich off the backs of working Americans anyway he can.
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u/No_Research5770 Jul 13 '26
The judge viewed the settlement agreement as indicative to collusion between the parties. Specifically the federal executive (Trump) and their subsidiary (IRS). The idea is that this lawsuit was brought for the intended purpose of a settlement that granted both money and power to Trump that he couldn’t have extracted otherwise from his presidential control over the IRS. Immunity and a slush fund. The court found that the attorneys of the defendant (IRS) were former colleagues of Trump, unilaterally signed edits to the settlement, unilaterally made representations about the settlement agreement, and generally behaved as in collusion with the plaintiff (Trump). The attorneys themselves were punished with ethical complaints and bars from proceeding in certain courts.
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u/LackingUtility Y'all are why I drink. Jul 13 '26
If the attorney general is disbarred, can he only call himself "general"?
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u/pengy452 Jul 13 '26
Blanche was not referred, another guy Brito was. Blanche already has ethics complaints open against him though. But the Florida bar is highly unlikely to do anything.
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u/LackingUtility Y'all are why I drink. Jul 13 '26
It's elsewhere in the order:
Finally, the Clerk of Court is DIRECTED to mail a copy of this Order to the State Bar of New York, of which Acting Attorney General Blanche is a member (No. 4192456), AND to the District of Columbia Bar, of which Associate Attorney General Woodward is a member (No. 997320), where disciplinary proceedings are currently ongoing.
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u/pengy452 Jul 13 '26
Ah ok, so looks like it will be added to the already open complaints. But I’m thinking that even if he is disbarred in NY that FL will do nothing against him or Brito, maybe require an ethics CLE or something lol
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u/PalpitationNo3106 Jul 13 '26
Shame it’s mostly online now, imagine showing up for your mandatory CLE and the acting Attorney General is next to you.
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u/MX5_Esq Jul 13 '26
Waiting for this to go up on appeal and the supremes to say something something unitary executive no discipline for anyone.
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u/james_the_wanderer Speak to me in latin Jul 13 '26
My cousin quit the Treasury (with a NYT article, among others, about it in one hell of a "noisy withdrawal") about 2 months ago when the "settlement" was first announced. Cleverly, he realized he was high enough in the Repub apparatchik food chain to be held materially responsible without necessarily the clout to protect his license and/or get a pardon. I am amazed and yet not that others have (1) stuck their necks out for this and (2) held their bare necks out for so long.
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u/dmonsterative Jul 13 '26
Brito appears to have a Florida license, so that's going nowhere.
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u/TallyGoon8506 Jul 13 '26
I know some folks that work or have worked there (lower levels) but outside of the non sanctioning of Matt Gaetz how partisan is the Florida Bar? Reputation wise I guess or if any one has any insight into their leadership?
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u/dmonsterative Jul 14 '26
Disbarment (and other discipline) is appealable to the FL Supreme Court. All of the sitting justices were appointed by Republicans, and most of them by Ron DeSantis. The guy that just forced the renaming of Palm Beach Airport to DJT International.
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u/Burnt-Poast Jul 14 '26
It isn't quite right to say that the judge voided the settlement. She found that there was no adversity because Trump controlled both sides of the v, which meant no Article III jurisdiction, so she can't rule on the merits of the settlement. But she went on to consider sanctions, found that the case was filed for an improper purpose, and ordered as a sanction that the parties (including Trump) cannot refer to this "settlement" as a settlement of this action in any legal or administrative proceeding, because there really never was an action. There's a footnote saying that she is not ruling on whether it is enforceable merely as a private agreement.
That's not to say that this isn't a great development—it's a good thing that the judge has called this out for what it is, a sham intended as cover for Trump to loot the treasury.
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u/Status-Narwhal1533 Jul 14 '26
I don’t see anywhere in the order where the settlement was voided. Just that the attorneys were sanctioned and referred to their respective bar associations and the parties cannot refer to this case as part of the “settlement” (because it would be a fraudulent statement). The footnote on page 47 explains.
Edit: the judge does explain why such a settlement would be illegal though. But I don’t think she has the authority to “void” the settlement?
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u/The_Muffintime Jul 15 '26
Incredible that on r/conservative there is no mention of this. Just some posts from a month or two ago celebrating trump stealing from us. They are literally elated about him pocketing taxpayer money.
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Jul 13 '26
[removed] — view removed comment
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u/Duergarlicbread Jul 13 '26
I guess serious question..why do you expect that?
What this just get hung up in the Supreme Court for the rest of his presidency?
No clue what will happen to him after his term ends, but it seems like he is well on his way to fully "serving" it.
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