11th Circuit Upholds Collusion Finding, Keeps Sanctions in Trump's $10 Billion IRS Suit

On October 1, 2026, a three-judge panel of the 11th U.S. Circuit Court of Appeals rejected an attempt by Donald Trump, Donald Trump Jr., Eric Trump and the Trump Organization to pause sanctions in their $10 billion lawsuit against the IRS and Treasury Department over the 2017 leak of Trump's tax returns, which had been used to support a settlement creating a $1.776 billion "anti-weaponization" fund. The panel found the appellants "did not make a strong showing that the district court committed clear error" in ruling the suit collusive and in bad faith, and left in place sanctions including a referral of attorney Alejandro Brito to the Florida Bar.

U.S. District Judge Kathleen Williams had concluded in July that "there was never adverseness between the Parties; there was never a case or controversy" -- meaning a sitting president's lawsuit against his own government was found to be a staged vehicle for a taxpayer-funded settlement, not a genuine dispute -- a rare instance of a federal court formally branding a Trump legal maneuver as collusive.

The collusion finding and sanctions stand while the broader appeal continues; the $1.776 billion fund itself was rescinded in August 2026.