SLUSH FUND Act of 2026
- Bill Number
- S. 4616
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-05-21: Read twice and referred to the Committee on Finance.
- Last Updated
- 2026-06-05T15:36:39Z
AI-Generated Summary
Summary of S. 4616 – SLUSH FUND Act of 2026
Purpose
This legislation amends the Internal Revenue Code of 1986 to impose a tax on certain payments received from settlement funds connected to civil lawsuits filed against the United States by specified individuals. The stated goal is to address payments derived from such outcomes.
Key Provisions
- Tax Imposition: A new Chapter 50B is added to Subtitle D, imposing a tax equal to 100 percent of any "specified settlement fund payment" received by a taxpayer in a taxable year.
- Definition of Specified Settlement Fund Payment: This includes amounts received from any fund, trust, or account funded by the outcome (settlement, verdict, or otherwise) of a civil action filed by a "specified person" against the United States or its agencies.
- Specified Person: Covers any individual who has served as President, their family members (spouse and relatives meeting section 152(d)(2) relationships), and entities controlled by them.
- Tax Treatment: The payment is excluded from gross income under Chapter 1 but is subject to the new 100 percent tax. The tax is treated as imposed under Subtitle A for administrative purposes and is nondeductible under section 275.
- Penalties: A new section 6660 imposes a 50 percent penalty on the tax for willful failure to pay or attempts to evade the tax.
- Reporting Requirements: A new section 6050BB requires trustees, administrators, or fiduciaries to file returns detailing aggregate payments and recipient information. These returns must be made publicly available by the Secretary within one month. Statements must also be provided to recipients. Failure to file triggers a $10,000 penalty per instance under section 6652(q), unless due to reasonable cause.
- Effective Dates: The tax and related amendments apply to amounts received on or after May 20, 2026; penalty and reporting provisions apply to taxable years ending on or after that date.
Significant Changes to Existing Law
- Creates an entirely new tax chapter (50B) and reporting section (6050BB) targeted at specific settlement-derived payments.
- Introduces mandatory public disclosure of returns related to these payments, which is not standard for most tax filings.
- Establishes new penalties for noncompliance specific to this category of payments.
- Modifies existing deduction rules (section 275) to prevent offsetting the new tax.
Potential Impacts
- Government Agencies: Increases IRS responsibilities for collecting the tax, enforcing penalties, processing public disclosures, and administering new reporting forms.
- Citizens: Directly affects recipients of qualifying payments by subjecting them to a 100 percent tax rate, with additional compliance and penalty risks; requires public availability of related information.
- International Relations: No direct provisions address foreign entities or relations.
Main Stakeholders Affected
- Former Presidents of the United States and their immediate family members.
- Entities controlled by former Presidents or their families.
- Trustees, administrators, and fiduciaries of settlement funds or trusts.
- The Internal Revenue Service and Treasury Department.
- Taxpayers receiving payments from the defined funds.
Notable Legal, Constitutional, or Political Implications
- The tax structure applies only to payments from lawsuits involving a narrowly defined group (former Presidents and associates), creating a targeted tax regime.
- Mandates public disclosure of specific tax-related returns, which could raise issues regarding privacy expectations in tax administration.
- The combination of a 100 percent tax rate, nondeductibility, income exclusion followed by separate taxation, and public reporting introduces unique compliance obligations not present in standard tax provisions.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (2)
Sen. Schumer, Charles E. [D-NY], Sen. Hickenlooper, John W. [D-CO]
Recent Actions
- 2026-05-21: Read twice and referred to the Committee on Finance.
- 2026-05-21: Introduced in Senate
Bill Versions
- Stop Letting United States Heads Funnel Unauthorized Nontransparent Dollars Act of 2026 — issued 2026-05-21 — PDF (8 pages)