Judge sanctions Trump's lawyers for IRS settlement, anti-weaponization fund

A federal judge lambasted and penalized the attorneys behind President Trump's settlement with the IRS, saying in an explosive Monday order that the case was a means to an end: judicial cover for a deal granting Trump audit immunity and creating his controversial anti-weaponization fund.

The big picture: The $1.776 billion pot of money, born from the Trump settlement, created an avalanche of bipartisan concern and legal scrutiny.

What she's saying: U.S. District Judge Kathleen Williams sanctioned the lawyers, deeming the lawsuit to have been "improperly employed" to justify the settlement fund.

• The "action was never about a party seeking judicial resolution of a legal issue or a factual dispute," she wrote in her scathing order.
• The suit, she continued, was "an attempt to use the Court to provide some legitimacy to an agreement to confer immunity to people and entities affiliated with the President and to earmark billions of dollars from American taxpayers to redress grievances not defined in the law."
• She referred one lawyer to the Florida Bar and sent her order to the New York and D.C. bars where acting Attorney General Todd Blanche and Associate Attorney General Stanley Woodward Jr. are members, respectively.

Catch up quick: Trump, his two eldest sons and the Trump Organization sued the IRS and Treasury in January over the 2019 leak of his tax returns by an IRS contractor.

• He dropped the suit in May. The DOJ then announced the nearly $1.8 billion fund, a formal apology and a bar on the IRS auditing him.
• Williams reopened the case to examine possible sanctions after 35 former federal judges said the deal was premised on deception.
• The White House referred requests for comment to Trump's personal lawyers. His lawyers and the Trump Organization did not immediately return requests for comment.

Between the lines: Trump's lawyers argued Williams couldn't act at all because dropping the suit stripped her of jurisdiction.

• She rejected that, ruling a court keeps power over "collateral" issues like sanctions even after a case ends. Otherwise, she said, a party could "abuse the judicial system" and "get off scot free" by pulling the plug.

The sanctions: In addition to sending her order to three bar associations, she blocked attorney Daniel Epstein from practicing in the Southern District of Florida for a year and barred Trump and the government from calling the deal to end the lawsuit a "settlement."

State of play: The administration abandoned the fund in June under bipartisan pressure, but the audit-immunity provision remains in place.

This is a breaking news story and will be updated.