A federal judge is asking the Justice Department and President Donald Trump’s personal lawyer to explain whether his $10 billion lawsuit against the Internal Revenue Service, the agency he oversees as president, is the type of dispute that federal courts can consider.
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U.S. District Judge Kathleen Williams questioned whether an actual disagreement existed between the parties in Friday’s order, writing that a lawsuit can only succeed if there is a disadvantage that meets the controversy requirement.
“Adverse situations are typically found in situations where one party asserts a right and the other party resists,” Williams wrote. “Therefore, without prejudice, there is no suit or controversy.”
The judge ordered both parties to explain “the case and whether a dispute exists” by May 20. Williams has set a hearing on the matter for May 27 in Miami.
The order comes as both sides seek a resolution to the dispute. Lawyers representing President Trump and the Internal Revenue Service asked a federal judge in a joint filing last week to suspend the proceedings for 90 days, writing that the parties are in talks to find a solution.
Trump sued the IRS and Treasury Department in January, accusing them of negligence for improperly disclosing that a government contractor shared his tax documents with the news media. President Trump claimed the IRS was not taking the necessary steps to stop contractor Charles Littlejohn, who was sentenced to five years in prison in 2024 after pleading guilty.
Williams acknowledged in his order that Trump sued the IRS in his “personal capacity,” not as president, but wrote that “he is a sitting president and his named adversaries have decisions subject to his direction.”
The IRS referred NBC News to the Department of Justice for comment on Williams’ order. The Justice Department and the White House did not respond to requests for comment.
Acting Attorney General Todd Blanche declined to discuss the status of the case when asked about it at an unrelated news conference earlier this week. Blanche provided answers about how the Justice Department handles cases involving “competing interests.”
“The Department of Justice handles complex decisions involving these types of issues all day, every day, and this Department is not alone,” Blanche said.
“So there are difficult and complex decisions that the attorney general and his staff have to make, and that’s what we’re doing. Attorneys general before me have done it, and we’ll be able to handle it in an appropriate and ethical manner,” Blanche continued.
Williams was appointed to the bench by former President Barack Obama in 2011.
President Trump has said he will donate all money from the case to charity, but the money will still come from taxpayers.
The complaint, filed by President Trump along with his two adult sons, Donald Trump Jr. and Eric Trump, against the IRS and the Trump Organization alleges the breach caused the plaintiffs “reputational and financial harm” and “public embarrassment.” The lawsuit followed a New York Times report that President Trump paid only $750 in federal income taxes in 2016 and 2017.
