Judge orders Trump to respond to $1.8B IRS fraud claims as U.S. appeals tariff refund ruling

President Donald Trump has been ordered by a federal judge to respond to serious fraud allegations in a case involving a $1.8 billion agreement tied to his dispute with the Internal Revenue Service, while the U.S. government is also moving to appeal a ruling on tariff refunds, according to Bloomberg and court-related reporting.

In the IRS case, the judge directed Trump to address what were described as “grievous allegations” that the settlement deal with the government may have amounted to a fraud on the court, Bloomberg reported. The order adds a new legal complication to a closely watched case involving the president and the tax agency, and it signals that the court wants direct answers before the matter moves further.

The dispute centers on a deal to create a $1.8 billion fund to resolve Trump’s lawsuit against the IRS. Bloomberg said the judge’s order requires Trump to confront allegations that the agreement itself may have been improperly obtained, raising questions about the circumstances under which the fund was established and whether the court was fully and accurately informed.

At the same time, the Trump administration has said it will appeal a court order requiring across-the-board refunds of tariffs that were ruled illegal, according to reporting from Moneycontrol summarizing the legal fight. The Justice Department filed notice that it intends to challenge the court’s authority to require customs officials to recalculate import taxes collected under Trump’s use of emergency powers.

That tariff dispute stems from a Supreme Court ruling in February that invalidated the tariffs and led to the launch of a Customs and Border Protection refund portal in April. The administration’s appeal could complicate an already active claims process for importers seeking repayment, with legal uncertainty now hanging over which refunds, if any, must ultimately be paid.

The stakes are significant because the tariff fight involves roughly $166 billion in levies that were struck down, according to the Moneycontrol report. If the appeal succeeds, it could limit or delay refunds for businesses that imported goods under the now-invalidated tariff regime; if it fails, the government may be forced to continue processing repayment claims more broadly.

Together, the two developments underscore how Trump and his administration are facing parallel legal and financial battles over executive power, tax-related claims, and trade policy. The IRS case will now move forward with Trump required to answer the fraud allegations, while the tariff dispute shifts to the appeals stage, where the administration is trying to narrow the scope of court-ordered refunds.