Trump-linked companies are backing away from a tax settlement that federal officials say can shield Mr. Trump, his family business and related entities from old IRS claims. The latest break came after John Cornyn said a proposed meeting with Todd Blanche had been called off on Wednesday, turning the deal from a legal footnote into a live political problem.
The settlement was finalized in May by the Justice Department to resolve a lawsuit brought by Mr. Trump. Acting Attorney General Todd Blanche signed a one-page document dated May 19 saying the Internal Revenue Service and the Treasury Department were forever barred and precluded from prosecuting or pursuing any and all claims tied to tax returns filed before the deal took effect. He also wrote that the agreement reaches trusts, parent, sister, related companies, affiliates and subsidiaries, language that has fueled the fight over how far the protection extends.
That reach is why Senate Democrats pushed for answers on whether companies co-founded by or affiliated with the Trump family are covered. Elizabeth Warren, Chuck Schumer and Ron Wyden sent letters to 11 businesses and organizations with ties to the Trump family, including Kaz Resources, Powerus, World Liberty Financial, American Bitcoin, Foundation Future Industries, 1789 Capital, Tag Air, Polymarket, Kalshi and Trump Media and Technology Group. Several of those businesses then distanced themselves from the deal, a sign that the companies themselves do not want to be seen claiming the benefit of a settlement that has become a political liability.
The most specific pushback came from the language of the deal itself. The Justice Department says the IRS and the Treasury Department are forever barred from claims tied to earlier tax returns, but the companies receiving the letters are trying to draw a line between being mentioned in a broad legal definition and being actual beneficiaries. Trump Media and Technology Group is majority owned by a trust that lists Mr. Trump as a beneficiary and runs Truth Social, while Donald Trump Jr. sits on Polymarket's advisory board and Kalshi said days before Mr. Trump took office for his second term that Trump Jr. would be a strategic adviser. Those ties are exactly what Senate Democrats wanted explained.
The dispute has now bled into Todd Blanche's own confirmation push, where the settlement and a $1.8 billion anti-weaponization fund have become sticking points for two Republican senators. Cornyn said the deal provides immunity to Mr. Trump from audits that no other taxpayer could possibly get, while Thom Tillis has moved closer to backing Blanche after initially holding back. What is still unresolved is whether the broad wording in Blanche's one-page order will ultimately be read to cover the Trump-affiliated companies that are now trying to step away from it.
