A US judge has found that President Donald Trump improperly used a $US10 billion lawsuit he filed against the IRS to extract personal benefits from the government he oversees, preventing the terms of a settlement agreement taking legal effect.
Miami-based US District Judge Kathleen Williams on Monday excoriated Trump's personal lawyers and lawyers in his administration, concluding their interests were not opposed to each other as is required for civil lawsuits, and that Trump's lawsuit was filed for an "improper purpose".
Williams referred a Trump lawyer in the case, Alejandro Brito, and senior Justice Department officials who approved the settlement to state bar authorities to determine if their actions violated legal ethics rules.
Williams concluded that lawyers on both sides of the case - Trump's personal lawyers and lawyers for the DOJ and IRS - misused the legal system to provide cover for actions aimed at benefiting Trump and his allies.
The settlement brokered in May between Trump's personal lawyers and senior officials at the Justice Department, led Trump to drop the suit in exchange for sweeping tax protections and the creation of a nearly $US1.8 billion ($A2.6 billion) fund for victims of so-called government weaponisation that critics said would benefit Trump's political allies.
Williams' order bars Trump, his adult sons and his namesake company from referring to the settlement or citing its terms in future legal proceedings, a move that could nullify the portion of the agreement barring the IRS from pursuing audits into past tax claims involving Trump or his businesses.
Acting Attorney-General Todd Blanche already told Congress that the plan for the weaponisation fund would not move forward.
The fund was initially aimed at compensating victims of "lawfare" and "weaponisation", terms that Trump has long used to describe legal cases against him and his allies.
A federal judge in Virginia in June blocked the Trump administration from setting up the fund.
Trump sued the IRS in January, accusing the agency of not doing enough to prevent the leak of his tax records during his first term in office and initially seeking $US10 billion.
The settlement came under withering scrutiny from critics, including some Republican lawmakers, who accused the Trump administration of self-dealing and seeking to funnel taxpayer money to political allies.
Blanche, under pressure from Republican senators, scuttled the weaponisation fund, but allowed the tax provision to remain in effect.
A spokesperson for Trump's legal team did not directly address the court's ruling, but repeated claims that Trump's tax records were improperly leaked and said the president "continues to hold those who wrong America and Americans accountable".
Williams' order comes two days before Blanche, a former personal lawyer to Trump, is set to appear before a Senate panel on his nomination to serve as the permanent attorney-general.
The IRS settlement agreement was already expected to be a central topic of conversation.