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: 50B Specified settlement fund payments Sec. 5000E. Imposition of tax on specified settlement fund payments. 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: 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.