He Sued Himself and Won

In October 2025, a reporter asked the President about the $230 million he was demanding from the Justice Department. He said the decision "would have to go across my desk." Then he said the part his lawyers wish he had not: "It sort of looks bad, I'm suing myself, right?"

Right. Three months later he did it in federal court. On January 29, 2026, Donald Trump, Don Jr., Eric, and the Trump Organization sued the IRS and the Treasury for $10 billion. The defendants report to the plaintiff. The lawyers defending the defendants were appointed by the plaintiff. Two of them used to be his personal defense attorneys.

You already know how a lawsuit ends when one man is holding both pens. What you may not know is how much it was worth, and that a federal judge has now put the word for it in writing.

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Start with the signatures. The agreement is signed for the government by Associate Attorney General Stanley Woodward, who represented Walt Nauta, Trump's co-defendant in the classified documents case. The order that made the audit shield permanent was issued May 19 by Acting Attorney General Todd Blanche, who was Trump's lead defense lawyer in that same case, and whose client list we walked through on Wednesday. Those are the men who decided the United States owed Donald Trump an apology.

Now read what the apology bought. The release clause makes Trump and his sons "forever discharge" the government from every claim in the case, plus the pending administrative claims over the Mar-a-Lago search and what the document itself calls the "Russia-collusion hoax." That is the $230 million he was embarrassed about in October, folded quietly into a deal where he technically takes nothing.

Technically. Because the same day, DOJ announced a $1.776 billion fund, named for 1776, for anyone claiming they were a victim of "weaponization." Five commissioners, all chosen by the Attorney General, removable by the President, no appeal, no judicial review, no obligation to publish who gets paid. Asked in the Senate on May 19 whether January 6 rioters who assaulted police could collect, Blanche declined to rule it out. Mitch McConnell's response: "Utterly stupid, morally wrong — take your pick."

The fund got the headlines. The audit shield is what matters to Trump's balance sheet, and it is the piece still standing.

Here is the buried proof point. In May 2024, Russ Buettner of the Times and Paul Kiel of ProPublica reported that the IRS had been fighting Trump for years over his Chicago tower. He declared the investment "worthless" in 2008 and claimed losses as high as $651 million. Then he moved it into a new partnership and claimed another $168 million in losses over the next decade. A 2019 IRS Chief Counsel memo, referring to the taxpayer only as "A," concluded he had effectively written off the same losses twice. The reporters put the potential bill above $100 million, before interest and penalties.

That audit was reportedly unresolved as of 2022. TIME reported August 5 that its status was still unclear this spring. Then Blanche's order said the IRS is barred from any examination, appeal, or monetary relief on any Trump return filed before May 18, 2026. Georgetown's David Super put it plainly: if Trump "underpaid taxes or made misleading statements in his returns prior to the day of the deal, he gets a free pass."

Danny Werfel, who ran the IRS until 2025, said he knew of no precedent for the agency agreeing in advance to permanently forgo examining returns it had already received. None. Not for a president, not for anyone. You cannot get that deal. I cannot get that deal. A man who signs the paychecks of the people across the table got that deal.

This is where the story turns, and it turned because judges refused to be props. On May 29, Judge Leonie Brinkema in Virginia froze the fund in Floyd v. Department of Justice. On June 12 she issued a preliminary injunction and ordered Blanche and Treasury Secretary Bessent to swear under penalty of perjury that the fund was dead. DOJ later confirmed the rescission in writing, which is what unlocked Senators Cornyn and Tillis for Blanche's confirmation.

In Florida, Judge Kathleen Williams had already warned in April that the parties did not look "sufficiently adverse to each other." After the 35 retired judges filed, she reopened the case. On July 13 she ruled the suit "was brought for an improper purpose — to gain the imprimatur of judicial legitimacy for a 'settlement' that had no viable basis in law." She wrote that "there was never adverseness between the Parties; there was never a case or controversy," and found the Trumps and the Justice Department "acted in bad faith." She referred Blanche and Woodward to their bars, referred Trump lawyer Alejandro Brito to the Florida Bar, and barred co-counsel Daniel Epstein from practicing in her district. Trump has appealed.

What is proven: the filing, the settlement text, the DOJ order, the fund, the injunction, the ruling. What is reported: the Chicago exposure and the audit's status. What is contested: whether the audit shield survives a finding that the case producing it was collusive. Blanche told the House on June 2 that it does. NYU's Tax Law Center says a settlement procured by fraud or misrepresentation is voidable. That fight is not over.

I spent twenty years in rooms where people confused winning with being right, and the tell was always the same: they stopped needing an opponent. That is the psychology here. Trump did not want a trial. A trial has a judge, a record, discovery into his returns. He wanted a signature from a man who owed him his job, and a court's stamp on top so the shield would outlive him. Williams denied him the stamp. Everyone else in the chain had already said yes.

Forward this to one person who still thinks the IRS treats everyone the same, and ask them when they last got a permanent audit waiver signed by their own lawyer.

Burn Notice: When the plaintiff appoints the defense, the verdict is not justice, it is an invoice for the government he bought.

— Michael

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