Trump lawyers hit with new blow as judge accuses them of abusing system

President Donald Trump’s legal team suffered a setback after a federal appeals court refused to pause sanctions imposed over his $10 billion lawsuit against the Internal Revenue Service.

Bloomberg reports that the 11th U.S. Circuit Court of Appeals in Atlanta has not stayed the July decision of U.S. District Judge Kathleen Williams as Trump and his lawyers carry out an appeal. Judge Williams concluded that both Trump and his lawyers had acted in bad faith and had improperly used the court system in order to obtain benefits from the federal government.

The sanctions imposed by Williams remain in effect. According to her order, Trump, his adult sons, the Trump Organization and government officials are not allowed to refer to the disputed agreement which concluded the IRS case as a valid settlement in any future judicial, administrative or regulatory proceedings.

In July, Williams stated that the lawsuit “was not brought to vindicate rights” but had instead been intended to "manipulate the judicial process"; she added that there had never actually been a real legal dispute between the parties since Trump, in his capacity as president, possessed authority over the federal agencies which he was suing.

In January, Trump filed a lawsuit concerning the unauthorized release of his tax records and asked the IRS and the Treasury Department for $10 billion in damages. The case was then withdrawn in May as a result of an agreement between Trump's lawyers and senior officials from the Justice Department which provided for protection from certain tax audits and also included the proposal of a fund of nearly $1.8 billion for individuals who claim to have been targeted by government “weaponization.”

The agreement's tax exemptions continued to be a point of controversy in the case, even though the fund was eventually given up.

In July, Williams ruled that the arrangement had no legal or factual basis and charged the parties with using litigation in order to grant the agreement a degree of judicial legitimacy; she referred Trump's lawyer Alejandro Brito to the legal disciplinary authorities in Florida and imposed a one-year ban on another lawyer, Daniel Epstein, from appearing in the Southern District of Florida.

She also sent copies of her decision to the disciplinary authorities who were examining the conduct of Attorney General Todd Blanche and Associate Attorney General Stanley Woodward.

Trump's lawyers and the Justice Department requested that the appeals court suspend the sanctions, on the grounds that Williams' order breached the First Amendment protections by limiting the parties' ability to speak about the agreement.

On Tuesday, the appeals court denied the request, and so the sanctions stayed in force as the appeal continued.

A spokesperson for Trump’s legal team had earlier supported the lawsuit by stating that the IRS had wrongly permitted confidential tax information about Trump and his family to be leaked and that Trump would keep pushing for accountability.