Sponsors (18)
The bill brings presidential damages into taxable income—increasing tax parity and modest revenues—while imposing a direct tax on the President and creating a precedent that could affect how damages to public officials are treated in the future.
Taxpayers: Bringing damages paid to the President into taxable income expands the tax base and may modestly increase federal revenues by eliminating a special tax-free exception.
The President (federal employees): Damages received from civil suits will be taxed like other compensation, promoting tax parity between the President and other compensated individuals.
Recipients of damages to public officials (taxpayers/officials): Establishes a precedent that could change how damages or settlements paid to public officials are taxed, complicating future settlement negotiations and expectations for similar payments.
The President (federal employees): Creates a new tax liability on damages received, reducing the after-tax amount the President would keep from civil suit awards.
Based on analysis of 2 sections of legislative text.
Makes damages paid to the President in civil actions against the United States taxable and removes their nondeductible exclusion.
Official title: To amend the Internal Revenue Code of 1986 to impose a tax on damages received by the President of the United States on account of any civil action filed against the United States, and for other purposes.
Introduced February 4, 2026 by Michael Thompson · Last progress February 4, 2026
Makes monetary damages paid to the President in civil lawsuits against the United States subject to federal income tax and removes those damages from the existing nondeductible exclusion. The change amends the Internal Revenue Code and applies to amounts received after the law takes effect.