11th Circuit rejects Trump bid to pause sanctions over IRS tax leak settlement

Key points

• The 11th Circuit Court of Appeals unanimously denied a bid to pause sanctions imposed on Trump attorneys Alejandro Brito and Daniel Epstein.
• Judge Kathleen Williams previously found the lawsuit was filed for an 'improper purpose' to lend judicial legitimacy to a settlement with no legal basis.
• The settlement briefly led to a $1.776 billion 'lawfare' fund, which was abandoned after public outrage over potential compensation for Jan. 6 riot defendants.
• Williams referred Brito to the Florida Bar for potential discipline and barred Epstein from practicing pro hac vice in the Southern District of Florida for one year.
• The appeals panel noted the request was premature because Williams has not yet ruled on a request to reopen the case or decided on attorneys' fees.
• Trump’s legal team argued the IRS wrongly allowed a rogue employee to leak confidential tax records to media outlets, framing the suit as a fight for accountability.

Background

This development follows a series of legal setbacks for the Trump administration in 2026, including a denied bid to tighten mail-in voting rules ahead of midterms and a rejected attempt to move his hush-money case to federal court. The current dispute centers on a May 2026 settlement regarding the leak of Trump’s tax records, which critics argued lacked legal basis and shielded the president and his family from IRS enforcement actions.

How outlets are covering it

CNBC and Politico both report on the 11th Circuit’s unanimous denial of the stay request, highlighting that the panel included judges appointed by both Trump and Obama. While both outlets emphasize Judge Williams’ findings of bad faith and the improper purpose of the lawsuit, CNBC provides additional detail on the specific sanctions, such as the referral to the Florida Bar and the pro hac vice ban. Politico focuses more on the broader context of the settlement, including the $1.776 billion fund and the protection of Trump’s family and businesses from tax liability. Both sources note Trump’s legal team’s defense that the IRS improperly leaked confidential information, but differ in their emphasis on the procedural aspects of the appeal, with CNBC noting the premature nature of the appeal due to pending decisions on reopening the case and attorneys' fees.

Why it matters

The ruling underscores the ongoing legal challenges facing the Trump administration in 2026, particularly regarding the handling of tax records and the use of the judicial system to legitimize out-of-court settlements. The sanctions against Trump’s attorneys and the potential disciplinary actions by the Florida Bar signal a stricter judicial stance on what is deemed bad faith litigation. This case also highlights the tension between the executive branch and the judiciary, as well as the public scrutiny over the use of legal mechanisms to shield political figures from accountability. The outcome may have implications for future cases involving political figures and the IRS, as well as the broader debate over the role of the judiciary in resolving political disputes.

What to watch

The next steps in this case will likely involve Judge Kathleen Williams’ decision on whether to reopen the case, as requested by a group of former judges, and her ruling on attorneys' fees. The outcome of these decisions could further impact the sanctions against Brito and Epstein and potentially lead to further legal challenges. Additionally, the Florida Bar’s review of Brito’s conduct may result in disciplinary actions, which could have broader implications for the legal profession and the handling of similar cases in the future. The Trump administration may also continue to pursue other legal avenues to challenge the settlement and the sanctions, potentially leading to further appeals or Supreme Court involvement.