A new filing in the legal battle between President Donald Trump and the IRS signals that the controversial anti-weaponization settlement — described by critics as a "slush fund" — remains active despite a federal judge's scathing rejection last month.

According to Lawfare senior editor Roger Parloff, Acting Deputy Attorney General Trent McCotter filed a motion demanding that the case be reassigned to a new judge. McCotter alleges that the current presiding judge rushed her opinion specifically to release it before Attorney General Todd Blanche was confirmed.

On July 13, U.S. District Judge Kathleen Williams delivered a forceful rebuke of Trump's $10 billion lawsuit against the IRS and the settlement that emerged from it. As Politico reported, Williams accused Trump of filing the lawsuit to "gain the imprimatur of judicial legitimacy for a 'settlement' that had no viable basis in law or fact." She further found that exempting Trump from audits would violate a federal law prohibiting the White House from directing IRS investigations. The IRS has maintained a policy of auditing sitting presidents since 1977, a practice established after the Nixon era to reinforce the principle that no one is above tax law.

Williams also noted that the case defied standard legal procedure because Trump, as president, was effectively suing an administration he himself leads — placing him in the position of both plaintiff and defendant.

"The court declines to adopt or accept the credulous exercise of divorcing President Trump's current job title from an understanding of what happened here," Williams wrote. "The Lead Plaintiff and the Government are one, a fully realized unitary interest."

She ruled that there had been collusion between both sides of the suit, issued sanctions against Trump's attorneys, and ordered an investigation into whether there had been a deliberate effort to mislead the court.

Trump has appealed the ruling. While he initially backed away from the fund in an effort to secure Blanche's confirmation, he has maintained his demand for immunity from IRS audits. Now that Blanche has been confirmed, commentators say Trump is likely to resume his push for both the fund and the audit immunity.

In their appeal, Trump's lawyers argued that Williams' order "incorrectly branded the litigation collusive, mistakenly accused Plaintiffs and counsel of bad faith, threatened professional licenses and reputations, imposed monetary sanctions, and entered a sweeping injunction forbidding future reference to the Settlement Agreement."

McCotter's reassignment request asserts that Judge Williams' order "contains numerous factual errors, typos, and erroneous citations, all suggesting a rush to issue Order." He alleges that the "circumstances give the strong appearance that the rushed issuance was done for an improper political motivation," noting that the order "repeatedly criticized the actions and ethics of the Department of Justice and Mr. Blanche." Motions to reassign cases in federal court typically require showing actual bias or a conflict of interest, and disagreements with a judge's reasoning alone rarely meet that threshold.

Regardless of whether these assertions ultimately hold, the filings make clear that Trump and his allies intend to continue pursuing the settlement fund — described as intended to benefit January 6 defendants — as well as tax audit immunity for the president and his family.