S. 4616: Stop Letting United States Heads Funnel Unauthorized Nontransparent Dollars Act of 2026

This bill, titled the Stop Letting United States Heads Funnel Unauthorized Nontransparent Dollars Act of 2026 (or SLUSH FUND Act of 2026), proposes amendments to the Internal Revenue Code of 1986 to impose a tax on certain payments made from specified settlement funds.

Key Provisions of the Bill

The main focus of the bill is to introduce a new tax on specified settlement fund payments. Here are the key elements:

1. Imposition of Tax

The bill states that:

• A tax of 100 percent will be imposed on any specified settlement fund payment received by a taxpayer during the taxable year.
• A specified settlement fund payment is defined as any payment received by a taxpayer from a fund or trust whose assets come from the result of a civil action against the United States or any of its agencies, filed by a specified person.

2. Definition of Specified Persons

Specified persons include:

• Individuals who have served as President of the United States.
• Family members of such individuals.
• Entities controlled by these individuals or family members.

3. Exclusions and Special Rules

• The payments that fall under this tax will not be included in the taxpayer's gross income for the respective taxable year.
• No deduction for these payments will be allowed when calculating income tax.
• Failure to pay the imposed tax can result in penalties, including a 50 percent penalty on the tax owed.

4. Reporting Requirements

Trustees and fiduciaries who make specified settlement fund payments must:

• File a return detailing the total payments made to taxpayers during the taxable year.
• Provide statements to each taxpayer that include details of the payment and a notice about the tax obligation.
• Failing to file the required return may incur a penalty of $10,000 for each failure unless reasonable cause is shown.

5. Effective Date

The provisions of the bill will apply to amounts received on or after May 20, 2026, with specific rules for penalties changing starting from that date as well.

Relevant Companies

None found