Judge appears skeptical of Trump’s $10 billion lawsuit against IRS and Treasury

By Aleena Fayaz, CNN

(CNN) — A federal judge on Friday questioned the constitutionality of President Donald Trump’s $10 billion lawsuit against the IRS and Treasury Department over the leak of his tax returns, ordering a hearing to determine whether the president can sue federal agencies that he oversees.

Florida District Judge Kathleen M. Williams said it is unclear whether Trump and the agencies are “sufficiently adverse to each other” and ordered both sides to provide more information on the relationship.

“Although President Trump avers that he is bringing this lawsuit in his personal capacity, he is the sitting president and his named adversaries are entities whose decisions are subject to his direction,” Williams, an Obama appointee, said in the order.

The judge noted the ways that Trump has sought to expand presidential power, pointing to an executive order barring executive branch employees from advancing legal interpretations that contradict the president’s “opinion on a matter of a law.”

“One such employee of the executive branch, the Attorney General, has a statutory obligation to defend the IRS when it is hailed into court, but then is ostensibly required by executive mandate to adhere to the President’s opinion on a matter of law in such a case,” Williams wrote. “This raises questions over whether the Parties here are truly antagonistic to each other.”

Williams’ questions come as Trump’s lawyers are engaged in talks with the IRS and Treasury to resolve the lawsuit, with the president’s attorneys requesting a 90-day extension while those discussions continue. If those talks resolve with any monetary settlement, it would be Trump’s own administration paying him and his family.

The judge also cited Trump’s comments acknowledging “the unique dynamic of this litigation,” pointing to a January trip aboard Air Force One, where the president told reporters that “it’s very interesting” to be on both sides of a lawsuit.

Trump shared at the time that he was thinking of donating money he might win from lawsuits against the government to charity. “We could make it a substantial amount,” he said, “nobody would care because it’s going to go to numerous very good charities.”

CNN has reached out to Trump’s lawyers, the Justice Department and Treasury for comment. The IRS deferred a request for comment to the Justice Department, which it said is handling this matter.

CNN Senior Legal Analyst Elie Honig said Williams is calling out the “obvious irregularity of having essentially the same person in interest” on both sides of the lawsuit.

“If this was not the President of the United States, it would be a perfectly valid claim. Clearly, Trump’s tax returns should not have been disclosed, but they were, that’s somebody’s fault,” Honig, a former federal prosecutor, said. “However, what makes this so bizarre and potentially inappropriate is Trump is essentially suing the executive branch that he now leads and so the conflicts of interest here jump off the page.”

The president, along with his sons Donald Trump Jr. and Eric Trump, filed suit in January, alleging that the government failed to protect his and the Trump Organization’s confidential tax information, which was leaked to the press by Charles Littlejohn, a former IRS contractor.

Littlejohn, who worked as a government contractor at Booz Allen Hamilton, illegally obtained and disclosed Trump’s tax returns to publications like the New York Times and ProPublica, the suit alleged.

In 2024, Littlejohn was sentenced to five years in prison for disclosing thousands of tax returns without authorization – from Trump and other wealthy individuals.

Trump’s legal team alleged that the IRS is legally responsible for Littlejohn’s actions because he had “staff-like access to tax returns and confidential tax return information” and exploited longstanding security failures that the IRS had been warned about but had gone uncorrected.

Trump’s efforts to resolve his lawsuit come as his Department of Justice recently settled two high-profile cases with former advisers.

The department reached a settlement this week in a lawsuit brought by former Trump campaign adviser Carter Page, who sued the DOJ and FBI over flawed government surveillance he faced due to his Russian contacts in 2016, hot off a $1 million settlement to resolve Trump’s former national security adviser Michael Flynn’s wrongful prosecution case.

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