Sponsors (50)
The bill trades substantial new revenue and stronger enforcement (funded by major IRS appropriations and a new wealth tax) and likely better service for taxpayers against higher compliance costs, greater privacy and reporting burdens, implementation complexity, and increased federal spending risks.
All taxpayers and the federal government: large new appropriations ($70B enforcement, $20B modernization, $10B taxpayer services) boost IRS enforcement capacity, modernize systems, and expand taxpayer services, which should improve compliance, speed processing, and reduce errors and delays.
Taxpayers and the government: stronger rules on foreign accounts and a mandated plan to manage chapter 4/FATCA data improve IRS ability to detect offshore tax avoidance and use existing information more effectively, likely increasing enforcement against hidden income.
High-net-worth individuals and the federal budget: creation of an annual net wealth tax starting in 2027 generates new, ongoing federal revenue that can reduce the deficit or fund public services.
Taxpayers subject to the wealth tax (especially those with complex holdings): will face higher compliance costs and frequent valuation disputes that increase audit, appraisal, and professional-fee expenses.
Taxpayers liable for the wealth tax: cannot deduct wealth taxes and face steeper accuracy-related penalties with lower thresholds, which raises their effective tax burden and increases the financial risk of contested valuations.
Taxpayers and the IRS: complex valuation rules, new payment-deferral mechanics, and expanded enforcement will demand significant IRS resources and risk inconsistent application in early years, creating uncertainty and uneven taxpayer experiences.
Based on analysis of 4 sections of legislative text.
Creates a new federal wealth tax for ultra-high-net-worth individuals, tightens valuation penalties, authorizes IRS funding, and grants anti-evasion rulemaking authorities.
Official title: To amend the Internal Revenue Code of 1986 to impose a tax on the net value of assets of a taxpayer, and for other purposes.
Introduced March 25, 2026 by Pramila Jayapal · Last progress March 25, 2026
Imposes a new federal annual wealth tax on very high-net-worth households by adding a new chapter to the Internal Revenue Code, creates new valuation-related penalties, and authorizes substantial Treasury/IRS funding to enforce and administer the tax. It also gives Treasury authority to write anti-evasion rules targeting asset shifts into foreign entities, allows temporary payment deferrals for taxpayers with severe liquidity problems, and requires Treasury reporting on administration and compliance. The measure changes accuracy-penalty rules tied to wealth valuations, disallows deductions for wealth taxes, phases in the law for calendar years after 2026, and authorizes tens of billions in IRS funding for enforcement, taxpayer services, and IT modernization from FY2027–2037.