In yet another unhinged attack on President Donald J. Trump, an activist federal appeals panel on Tuesday sided with a lower court judge who claimed that President Trump “colluded” with his own Department of Justice and the Internal Revenue Service (IRS) in bringing and subsequently dismissing a major damages lawsuit over the illegal leaking of his tax records.
The U.S. Court of Appeals for the Eleventh Circuit denied a motion filed by President Trump, his sons Donald Trump Jr. and Eric Trump, the Trump Organization, and their attorneys seeking a stay of post-judgment sanction proceedings pending appeal.
As previously reported by The Gateway Pundit, President Trump originally filed suit in January 2026 seeking $10 billion in damages against the IRS and the Department of the Treasury after rogue IRS operatives illegally accessed and leaked private Trump family tax documents to the mainstream media.
They alleged a former IRS contractor illegally accessed and disclosed their confidential tax returns, in violation of 26 U.S.C. § 6103 and § 7431 and the Privacy Act. They sought at least $10 billion.
That contractor was Charles Littlejohn. He stole and leaked Trump’s returns to the New York Times and ProPublica. He was convicted and sentenced to five years in prison.
As The Gateway Pundit reported in May, Trump, his sons, and the Trump Organization did not pocket a personal payout. The May settlement, announced by the Department of Justice, created a $1.776 billion Anti-Weaponization Fund, drawn from the federal Judgment Fund, to compensate Americans targeted by prior government lawfare. Unused money reverts to the Treasury. Future tax returns remain subject to ordinary IRS examination.
The corporate media still calls it a slush fund. Democrat governors tried to tax the payouts at 100 percent. The Gateway Pundit reported that California Governor Gavin Newsom vowed to confiscate every dime paid to California residents and dismissed the fund as a “slush fund.”
Then the former judges showed up
After Trump’s lawyers filed a notice of voluntary dismissal with prejudice under Rule 41, the case closed the same day. Then 35 former federal judges moved to set the dismissal aside. They told Williams the settlement was “a product of collusion and [wa]s itself a fraud on the [c]ourt.”
The Gateway Pundit reported that U.S. District Judge Kathleen Williams in the Southern District of Florida, the Obama appointee, launched the inquiry. She later concluded the lack of adversity was “so obvious and so insurmountable” that the suit was filed for the improper purpose of legitimating “a ‘settlement’ that had no viable basis in law or fact.”
The Department of Justice has rejected that. As quoted by the Financial Times after the July order: “There was no collusion in this case, and the partisan judge who speculated otherwise has disregarded decades of precedent. This case was brought by President Trump in his personal capacity, as well as by several members of his family, who were all victims of admitted violations of law.”
On Tuesday, the three-judge panel denied an emergency request by Trump, his attorneys, and other appellants seeking to stay portions of U.S. District Judge Kathleen Williams’ sanctions order while their appeal moves forward.
According to The Hill, the ruling backed Williams’ earlier determination that Trump’s lawsuit and the subsequent agreement involving his administration were collusive. Reuters similarly reported that the Eleventh Circuit refused to pause the sanctions.
But there is an important distinction: Tuesday’s ruling was not a final decision affirming Williams’ collusion finding on the merits.
The appellate panel was considering whether the sanctions should be suspended while the larger appeal continues. The court specifically noted that its decision as a stay panel does not bind the judges who will ultimately decide the merits of the appeal.
Still, the panel concluded that Trump and the other appellants failed, at this stage, to make the strong showing required to demonstrate that Williams clearly erred when she found collusion and bad faith.
The appeals court wrote that Trump’s side “did not submit or offer any evidence” explaining the litigation conduct or demonstrating that the lawsuit and settlement were not collusive.
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