S. 4616

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 4616 Introduced in Senate (IS)]

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119th CONGRESS
2d Session
S. 4616

To amend the Internal Revenue Code of 1986 to impose a tax on specified 
settlement fund payments, and for other purposes.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

May 21, 2026

Mr. Wyden (for himself and Mr. Schumer) introduced the following bill; 
which was read twice and referred to the Committee on Finance

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to impose a tax on specified 
settlement fund payments, and for other purposes.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Stop Letting United States Heads 
Funnel Unauthorized Nontransparent Dollars Act of 2026'' or the ``SLUSH 
FUND Act of 2026''.

SEC. 2. IMPOSITION OF TAX ON SPECIFIED SETTLEMENT FUND PAYMENTS.

(a) In General.--Subtitle D of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new chapter:

``CHAPTER 50B--SPECIFIED SETTLEMENT FUND PAYMENTS

``Sec. 5000E. Imposition of tax on specified settlement fund payments.

``SEC. 5000E. IMPOSITION OF TAX ON SPECIFIED SETTLEMENT FUND PAYMENTS.

``(a) In General.--There is hereby imposed on any taxpayer for any 
taxable year a tax equal to 100 percent of any specified settlement 
fund payment received by such taxpayer during such taxable year.
``(b) Specified Settlement Fund Payment.--For purposes of this 
section--
``(1) In general.--The term `specified settlement fund 
payment' means, with respect to any taxpayer for any taxable 
year, any amount received by such taxpayer during such taxable 
year from any fund, trust, or account the assets of which are 
derived from the outcome (whether by settlement, verdict, or 
otherwise) of any civil action which was filed by a specified 
person against the United States (or any agency or 
instrumentality thereof).
``(2) Specified person.--
``(A) In general.--The term `specified person' 
means--
``(i) any individual who has served as 
President of the United States,
``(ii) any member of the family of such 
individual, and
``(iii) any person controlled (based on 
principles similar to the principles which 
apply for purposes of section 52(b)) by one or 
more individuals described in clause (i) or 
(ii).
``(B) Member of the family.--The term `member of 
the family' means, with respect to any individual 
described in subparagraph (A)(i)--
``(i) the spouse of such individual, and
``(ii) any individual who bears a 
relationship to such individual which is 
described in subparagraphs (A) through (G) of 
section 152(d)(2).
``(c) Special Rules.--
``(1) Administrative provisions.--For purposes of subtitle 
F, any tax imposed by this section shall be treated as a tax 
imposed by subtitle A.
``(2) Exclusion from gross income.--For purposes of chapter 
1, the gross income of any taxpayer for any taxable year shall 
not include any specified settlement fund payment received by 
such taxpayer during such taxable year.''.
(b) No Deduction From Income Tax.--Section 275(a)(6) of such Code 
is amended by inserting ``50B,'' after ``50A,''.
(c) Failure To Pay Tax on Specified Settlement Fund Payments.--Part 
I of subchapter A of chapter 68 of such Code is amended by adding at 
the end the following new section:

``SEC. 6660. FAILURE TO PAY TAX ON SPECIFIED SETTLEMENT FUND PAYMENTS.

``Any taxpayer who, with respect to any taxable year--
``(1) willfully fails to pay the tax imposed by section 
5000E(a), or
``(2) willfully attempts in any manner to evade or defeat 
such tax or the payment thereof,
shall, in addition to other penalties provided by law, be liable for a 
penalty of 50 percent of such tax for such taxable year.''.
(d) Clerical Amendments.--
(1) The table of chapters for subtitle D of such Code is 
amended by adding at the end the following new item:

``Chapter 50B--Specified Settlement Fund Payments''.

(2) The table of sections for part I of subchapter A of 
chapter 68 of such Code is amended by adding at the end the 
following new item:

``Sec. 6660. Failure to pay tax on specified settlement fund 
payments.''.
(e) Effective Dates.--
(1) In general.--Except as provided by paragraph (2), the 
amendments made by this section shall apply with respect to 
amounts received on or after May 20, 2026.
(2) Failure to pay tax on specified settlement fund 
payments.--The amendment made by subsection (c) shall apply 
with respect to taxable years ending on or after May 20, 2026.

SEC. 3. RETURNS RELATING TO SPECIFIED SETTLEMENT FUND PAYMENTS.

(a) In General.--Subpart B of part III of subchapter A of chapter 
61 of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 6050BB. RETURNS RELATING TO SPECIFIED SETTLEMENT FUND PAYMENTS.

``(a) Requirement of Reporting.--Every trustee, administrator, or 
other fiduciary who makes any specified settlement fund payment (as 
defined in section 5000E(b)) to any taxpayer during any taxable year 
shall make a return, according to the forms and regulations prescribed 
by the Secretary, setting forth--
``(1) the aggregate amount of such payments received by 
such taxpayer during such taxable year, and
``(2) the name and address of such taxpayer.
``(b) Statements To Be Furnished With Respect to Whom Information 
Is Required.--Every person required to make a return under subsection 
(a) shall furnish to each taxpayer whose name is required to be set 
forth in such return a written statement--
``(1) showing the identity of the trustee, administrator, 
or other fiduciary making the specified settlement fund 
payment,
``(2) showing the aggregate amount of such payments 
received by such taxpayer required to be shown on the return, 
and
``(3) notifying that such payments are subject to the tax 
imposed by section 5000E(a).
The written statement required under the preceding sentence shall be 
furnished to the taxpayer on or before January 31 of the year following 
the taxable year for which the return under subsection (a) was required 
to be made.
``(c) Public Disclosure of Returns.--The Secretary shall, not later 
than 1 month following receipt of a return under subsection (a), make 
such return publicly available (in such form and manner as the 
Secretary determines appropriate).''.
(b) Failure To File Return With Respect to Specified Settlement 
Fund Payments.--Section 6652 of such Code is amended by adding at the 
end the following new subsection:
``(q) Failure To File Return With Respect to Specified Settlement 
Fund Payments.--In the case of any failure to make a return required 
under section 6050BB which contains the information required by such 
section on the date prescribed therefor, unless it is shown that such 
failure is due to reasonable cause, there shall be paid (on notice and 
demand by the Secretary and in the same manner as tax) by the person 
failing to file such return, an amount equal to $10,000 for each such 
failure.''.
(c) Clerical Amendment.--The table of sections for subpart B of 
part III of subchapter A of chapter 61 of such Code is amended by 
adding at the end the following new item:

``Sec. 6050BB. Returns relating to specified settlement fund 
payments.''.
(d) Effective Dates.--
(1) In general.--Except as provided by paragraph (2), the 
amendments made by this section shall apply with respect to 
amounts paid on or after May 20, 2026.
(2) Failure to file return with respect to specified 
settlement fund payments.--The amendment made by subsection (b) 
shall apply with respect to taxable years ending on or after 
May 20, 2026.
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