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A United States (US) judge has cancelled a tax settlement between President Donald Trump and the IRS, saying the case was filed for an “improper purpose.” The deal would have protected Trump, his family and businesses from some tax audits.
Trump, his two eldest sons and the Trump Organisation had sued the IRS for $10 billion over the leak of confidential tax records by a former agency contractor to media organisations.
The case was settled in May, with the agreement offering broad protection from existing tax investigations and claims involving Trump, his family and affiliated businesses.
The deal also included a proposed $1.8 billion taxpayer-funded compensation programme for people who claimed they were targeted by politically motivated government investigations. The programme was later dropped after criticism.
However, US District Judge Kathleen Williams ruled on Monday that there was no valid legal dispute between Trump and the IRS because Trump, as president, oversees the agency and the Treasury Department.
The judge said the lawsuit was filed to give legal approval to a settlement that had “no viable basis in law or fact.” Williams also accused Justice Department officials of failing to protect the public interest by supporting a deal that went beyond their legal authority.
She referred one of Trump’s private lawyers involved in approving the settlement to legal disciplinary authorities and ordered her ruling to be sent to the New York State Bar and the District of Columbia Bar.
The judge also restricted another Trump lawyer from appearing in her South Florida court for one year.
Trump and the Justice Department have not immediately commented on the ruling.
A spokesperson for Trump’s legal team, however, said the president would continue to “hold those who wrong America and Americans accountable.”
