Trump v. Internal Revenue Service
Case Overview
President Trump, Donald Trump Jr., Eric Trump, and the Trump Organization sued the IRS and Department of the Treasury over the actions from IRS contractor Charles Littlejohn in 2019 where he released their confidential tax returns.
The Application
IRS contractor Charles Littlejohn illegally disclosed the confidential tax returns of Donald Trump, his sons Eric and Donald Jr., and the Trump Organization to news organizations including the New York Times and ProPublica. Littlejohn pleaded guilty in 2023 and was sentenced to 60 months incarceration. Plaintiffs filed this $10 billion lawsuit in January 2026 -- more than two years after appearing as victims at Littlejohn's plea hearing. The DOJ, which vigorously defended the government in every other Littlejohn-related case, never appeared, never filed an answer, and never challenged Plaintiffs' claims. Instead, the parties executed a "settlement agreement" that included a formal apology, a $1.776 billion Anti-Weaponization Fund from the Treasury Judgment Fund, and a Release Order barring future IRS audits of the Trump family. The Court found President Trump controlled both sides through the Article II Vesting Clause, his appointment and removal authority over the Secretary of the Treasury and IRS officials, and Executive Order 14215 Section 7, which prohibits executive employees from advancing legal positions contrary to the President's in litigation.
The Conclusion
The Court found there was never adverseness between the parties, never a case or controversy, and never a question as to who would prevail. The lawsuit was brought for the improper purpose of gaining judicial legitimacy for a settlement with no basis in law or fact. The Court imposed Rule 11 sanctions: referring Plaintiffs' attorney Alejandro Brito to the Florida Bar, denying Daniel Epstein's pro hac vice applications for one year, prohibiting the parties from citing the settlement agreement in any proceeding, and directing copies of the order to the New York Bar (Acting AG Todd Blanche) and D.C. Bar (Associate AG Stanley Woodward Jr.). The Court also found bad faith warranting monetary sanctions under its inherent authority. The practical effect of the settlement-use prohibition is that Plaintiffs cannot demand money under the agreement in any official proceeding.
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