A federal judge has raised constitutional concerns over a $10 billion lawsuit filed by Donald Trump against the Internal Revenue Service and the U.S. Department of the Treasury, ordering both sides to explain how a sitting president can legally pursue claims against agencies he oversees, according to court filings in the Southern District of Florida.
U.S. District Judge Kathleen Williams issued the directive on April 25 in the case Trump v. IRS, No. 1:26-cv-20609, setting a May 20 deadline for written submissions and scheduling a hearing for May 27. Her order focused on whether the lawsuit meets the constitutional requirement of a genuine dispute between opposing parties.
"Typically, adverseness is found in a situation where one party is asserting its right and the other party is resisting," Williams wrote. "Consequently, if there is no adverseness, there is no case or controversy."
The lawsuit, filed in January 2026 by Trump, his sons Donald Trump Jr. and Eric Trump, and the Trump Organization, alleges that federal agencies failed to protect confidential tax information later disclosed to media outlets. The complaint seeks at least $10 billion in damages tied to the unauthorized release and subsequent publication of tax records.
The disclosures stem from actions by Charles Littlejohn, a former IRS contractor employed by Booz Allen Hamilton, who pleaded guilty in 2023 to leaking tax data to The New York Times and ProPublica. The reporting revealed Trump paid $750 in federal income taxes in 2016 and 2017, a finding that triggered extensive political and legal fallout.
Trump's legal team argued in the complaint that the leak caused "reputational and financial harm, public embarrassment, unfairly tarnished their business reputations, portrayed them in a false light, and negatively affected President Trump, and the other Plaintiffs' public standing." A spokesperson added: "The IRS wrongly allowed a rogue, politically motivated employee to leak private and confidential information about President Trump, his family, and the Trump Organisation to The New York Times, ProPublica and other left-wing news outlets."
Judge Williams' concerns extend beyond the facts of the leak to the structure of the litigation itself. She pointed to executive branch dynamics, noting that the attorney general is both obligated to defend federal agencies and subject to presidential authority. "This raises questions over whether the parties here are truly antagonistic to each other," she wrote.
The constitutional issue has drawn intervention from outside groups, including Citizens for Responsibility and Ethics in Washington, which filed an amicus brief warning of "collusive litigation tactics." The filing stated: "This case is extraordinary because the president controls both sides of the litigation, which raises the prospect of collusive litigation tactics."
Additional concerns center on potential taxpayer exposure if the case is settled. Because any payout would come from federal funds, critics argue that a settlement could effectively transfer public money to the president. Trump has said he would donate proceeds to charity, though no legal mechanism enforces that commitment.
Acting Attorney General Todd Blanche declined to discuss specifics but said, "the Department of Justice handles complicated decisions involving those type of issues every day, all day," adding that officials would manage the matter "in an appropriate and ethical manner."
The unusual legal posture has also prompted legislative attention. Representative Mike Thompson introduced the Prevent Presidential Profiteering Act, which would impose a 100% tax on settlements paid by the government to a sitting president or immediate family members in cases filed during their time in office. The bill has yet to advance in Congress.
