Trump Loses Emergency Bid to Block Sanctions in $1.776B IRS 'Settlement' Fight — After Prez Failed to Overcome Collusion Findings
President Donald Trump lost his emergency bid to block sanctions stemming from the explosive $1.776billion IRS settlement fight.
Sept. 29 2026, Published 6:20 p.m. ET
President Trump has suffered a fresh legal setback after a federal appeals court rejected his attempt to temporarily block sanctions stemming from a stunning $1.776billion IRS settlement fight, RadarOnline.com can reveal.
The U.S. Court of Appeals for the Eleventh Circuit denied a motion from Trump, sons Donald Jr. and , the Trump Organization, and two attorneys seeking to stay portions of a district court's sanctions order while they pursue an appeal.
Billion-Dollar IRS Fight
Trump and sons Don Jr. and Eric were among the appellants seeking to block the sanctions.
According to court documents obtained by Radar, the dispute began when Trump and his family filed a lawsuit against the Internal Revenue Service and Treasury Department in January, alleging a former IRS employee illegally accessed and disclosed their tax returns.
They sought damages of "at least $10billion."
But the litigation took a dramatic turn after the plaintiffs voluntarily dismissed the case with prejudice, and 35 former federal judges subsequently challenged an announced agreement between the parties.
According to the appeals court's account, the agreement provided for a whopping $1.776 billion settlement fund from the Treasury to be paid to people who were not parties to the litigation.
Bad Faith Findings
The district court found the lawsuit was collusive and filed for an improper purpose.
It also included a government release of "any and all claims" it had or could have against the plaintiffs, Trump's family and businesses through May 18, 2026. The former judges alleged the agreement was the product of collusion and constituted a fraud on the court.
The district court ultimately found the parties were not truly adverse and concluded the lawsuit was collusive and jurisdictionally improper.
It further determined the plaintiffs acted in bad faith and for an improper purpose by filing the lawsuit to provide cover for a collusive settlement.
Appeals Court Blow
The appeals court refused to put the sanctions on hold as Trump and his co-appellants fight the lower court's ruling.
The sanctions also restrict Trump and the other appellants from using or citing provisions of the purported settlement as evidence that a settlement was reached in the case in judicial, administrative, regulatory, arbitration, or other official proceedings.
Trump and the other appellants asked the Eleventh Circuit to put those restrictions on hold while they challenge the lower court's ruling, but the three-judge panel refused.
The appellants also attacked the speech-related sanction, arguing it amounted to an unconstitutional "gag order" and prior restraint violating the First Amendment.
'Gag Order' Fight
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Trump's side argued the speech-related sanction amounted to an unconstitutional 'gag order.'
The appeals court was unconvinced, noting the district court had clarified the restriction was narrower than Trump's side claimed and applied to using the purported settlement as evidence of a settlement in official proceedings.
The panel ultimately ruled the appellants had not demonstrated a strong likelihood of succeeding on either challenge. Its conclusion was blunt: "STAY DENIED."
The underlying proceedings aren't finished. The district court has yet to rule on the former judges' request to reopen the case, while proceedings concerning attorneys' fees remain ongoing.
