Oligarch Act of 2025

Summary

Creates a new federal wealth tax by adding a new chapter to the Internal Revenue Code, disallows income tax deductions for that wealth tax, and builds in compliance and enforcement rules. The bill requires Treasury to issue implementing rules within 12 months, allows up to a 5-year payment extension for taxpayers facing severe liquidity constraints or undue hardship, exempts entities that are tax-exempt under section 501(a), and raises accuracy-related penalties for substantial understatements of wealth valuations.

• Creates a new wealth tax chapter in the Internal Revenue Code (substantive tax text not included in summary).
• Disallows federal income tax deductions for taxes imposed under the new wealth tax.
• Permits Treasury to grant up to 5-year payment extensions for taxpayers with severe liquidity constraints or undue hardship.
• Requires Treasury to issue implementing rules within 12 months of enactment.
• Establishes stricter valuation penalties: a 65% threshold for substantial understatement, with a $5,000 annual floor for applicability.
• Increases penalty rates for valuation misstatements to 50% for gross misstatements and 20% for other substantial misstatements.
• Explicitly exempts entities that are tax-exempt under section 501(a) from the wealth tax.
• Effective for calendar years beginning after enactment and includes technical updates to the Code's subtitle table.
• Creates new compliance, reporting, and valuation responsibilities for affected taxpayers and advisors.
• Key operational details (rates, thresholds, valuation methods) are absent from the summary and await Treasury rules or the full chapter text.