WASHINGTON — The U.S. Justice Department is pushing back on requests for information about how it resolved President Donald Trump’s $10 billion lawsuit against the Internal Revenue Service, accusing challengers of the deal of improperly using the courts to pry loose details they aren’t entitled to receive.

At a hearing on Friday, a federal magistrate judge in Alexandria, Virginia, accused the U.S. of failing to comply with court rules by refusing to fully respond to questions about the origins of the arrangement with Trump. The judge gave both sides another chance to reach an agreement before he takes a heavier hand in dictating what the government must produce. However, he did order the release of certain preliminary disclosures in the next week.

The lawsuit in Virginia by a group of Trump critics challenges a now-defunct plan to create a $1.8 billion fund for victims of alleged government “weaponization” as well as a still-active order from Attorney General Todd Blanche immunizing Trump, several of his family members and his company from audits into past tax filings. As part of that arrangement, Trump dropped his lawsuit in Florida against the IRS.

A major sticking point so far in the Virginia case involves requests by the challengers for the names of individuals involved not only in creating or executing the fund plan and the broader settlement agreement, but also in the “conception” of the terms. Blanche announced he would abandon the fund plan in response to Republican opposition, but Trump has continued to express support for the idea and the settlement agreement hasn’t been formally changed.

During Friday’s hearing, U.S. Magistrate Judge Ivan Davis said the Justice Department had to produce names or explain why that information is shielded by attorney-client privilege or other protections, but had done neither. The government’s stance on what’s known as discovery — the exchange of evidence and information in litigation — was “untenable,” he said.

“You have failed on both ends of the discovery process,” Davis told Justice Department senior counsel Andrew Block. “That cannot continue.”

Later in the hearing, the judge told Block that although he understood “you’re not running the show,” the rules apply to all parties involved.

Block said the government replied in “good faith” to the challengers’ requests for information and accused them of failing to reasonably narrow the potential offices and people to search for documents related to the Trump deal.

A lawyer for the challengers pushed back, saying they made clear they were seeking evidence related to people with decision-making authority, not all 190,000 employees of the Justice and Treasury Departments.

The plaintiffs in the Virginia lawsuit include a former federal prosecutor who pursued charges related to the Jan. 6, 2021, attack on the U.S. Capitol – defendants in those cases were expected to benefit from the “weaponization” fund. Also among the plaintiffs is a federal employee union alleging the audit immunity is unlawful and could force IRS workers to violate their oaths of office.

Davis ordered both sides to meet next week to resolve the impasse. If they can’t agree, he scheduled another hearing for Sept. 4 to decide whether to compel the government to turn over information.

Federal magistrate judges are appointed by U.S. district courts for eight-year terms and typically handle issues like evidence disputes but not the merits of lawsuits. U.S. District Judge Leonie Brinkema, who is presiding over the Virginia case, will hold a hearing on Sept. 18 on the administration’s arguments for why the lawsuit should be tossed out.

Trump separately is appealing a Florida federal judge’s order finding he brought the IRS case in “bad faith.”

©2026 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.