US judge declares Trump's tax deal 'improper', leaving future financial implications unclear

A US judge on Monday voided a settlement between Donald Trump and the Internal Revenue Service giving the president and his allies sweeping protections from audits, ruling that his lawsuit over leaked tax returns had been filed for an "improper purpose."

Trump, his two eldest sons and the Trump Organization sued the IRS for $10 billion over the disclosure of confidential records by a former agency contractor to news organizations.

The case ended in May with a hugely contentious agreement granting Trump, his family and affiliated businesses sweeping protection from existing tax examinations and claims.


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It also established a $1.8 billion taxpayer-funded program to compensate people who alleged they had been targeted by politically motivated government investigations, although the measure, derided as a "slush fund for criminals", was later abandoned.

District Judge Kathleen Williams said there had never been a genuine legal dispute between Trump and the IRS because, as president, he effectively controls the agency and the Treasury Department.

"And because this fact was so obvious and so insurmountable, the court finds that this matter was brought for an improper purpose - to gain the imprimatur of judicial legitimacy for a 'settlement' that had no viable basis in law or fact," Williams wrote.

She accused the government of abandoning its duty to defend the public interest, saying Justice Department officials had disregarded policies and pursued objectives that exceeded - and in some cases violated - their legal authority.

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The judge referred one of Trump's private attorneys and senior Justice Department officials involved in approving the settlement to legal disciplinary authorities.

She also barred another Trump lawyer from appearing in her South Florida court for one year.

Trump had no immediate reaction to the ruling but a spokesman for his private legal team said the president would continue to "hold those who wrong America and Americans accountable," according to CNN.