S.Amdt. 5464

SA 5464, submitted by Ms. Cortez Masto and Mr. Wyden, aims to add a new chapter to the Internal Revenue Code of 1986 to create an excise tax on covered settlement payments.

The amendment proposes the following:

• Tax Imposition: A tax equal to the amount of any covered settlement payment received by a covered individual.
• Covered Individual: An individual convicted of a serious violent felony under Federal, State, tribal, territorial, or military law prior to the last day of the taxable year the payment was received, regardless of whether the conviction was vacated, set aside, expunged, or pardoned.
• Covered Fund: Any fund, account, trust, or escrow where assets come mostly or entirely from U.S. payments to settle civil actions started by a former President or a corporate entity owned or controlled by a former President.
• Covered Settlement Payment: Any payment received directly or indirectly by an individual from a covered fund.
• Key Rules:
  • The tax must be paid by the individual receiving the payment.
  • No deductions are allowed for the payment of this tax.
  • These payments are excluded from the individual's gross income.
  • The Secretary will provide guidance to prevent avoiding the tax through gifts, nominees, or similar arrangements.

The amendment would apply to payments received on or after the date the Act is enacted, regardless of when the fund was created.