A federal judge in the Southern District of Florida has blocked a proposed settlement in President Donald Trump’s lawsuit against the IRS and the Treasury Department, finding the case was pursued for an “improper purpose” and referring the lawyers involved for possible disciplinary review.

A federal judge in Miami has thrown out a purported settlement between President Donald Trump and the IRS, finding that the underlying lawsuit was brought in bad faith and that the agreement cannot be relied on in future proceedings. In the same order, U.S. District Judge Kathleen Williams reportedly referred the lawyers involved to disciplinary authorities—an unusually sharp response that raises the stakes well beyond the immediate dispute.

The ruling is notable for two reasons.

A federal judge in the Southern District of Florida has ordered additional scrutiny of the settlement resolving Donald Trump’s $10 billion lawsuit against the IRS and the Justice Department, an unusual step that puts the mechanics of government dealmaking under a brighter spotlight.

U.S. District Judge Kathleen Williams’ order follows objections from retired judges who challenged the arrangement and argued that the settlement may raise concerns about collusion, abuse of process, or other irregularities.

A newly filed motion in the Southern District of Florida puts a threshold issue front and center: whether the federal court has power to hear the case at all. In Defendant's MOTION to Dismiss for Lack of Jurisdiction 136 Amended Complaint/Amended Notice of R ..., filed April 27, 2026, the defendant challenges the operative amended pleading on jurisdictional grounds, asking the court to dismiss before the case proceeds further on the merits.

At a high level, this kind of motion seeks dismissal under the court’s limited jurisdictional authority, arguing that the amended complaint—or related amended notice—fails to establish a proper basis for federal adjudication.