Ultra-Millionaire Tax Act of 2026

Summary

Imposes a new federal "wealth tax" on ultra-high-net-worth taxpayers by adding a new chapter to the Internal Revenue Code, creates related valuation and reporting rules and penalties, and gives the Treasury authority to limit evasion through foreign entities. It also authorizes $100 billion in Treasury/IRS funding for fiscal years 2027–2037 to support enforcement, taxpayer services, and business-system modernization. The measure sets effective dates (calendar years beginning after Dec 31, 2026), creates a penalty regime for large valuation understatements, allows limited multi-year payment deferrals for severe liquidity hardship, requires Treasury rulemaking and reports to Congress, and directs anti-evasion rulemaking and data-use planning to improve compliance.

• Creates a new federal wealth tax by adding Chapter 18 to the Internal Revenue Code, effective for calendar years starting after Dec 31, 2026.
• Adds a nondeductibility rule so Chapter 18 taxes cannot be deducted under current tax rules.
• Adds stricter accuracy-related penalties tied to valuation understatements (65% threshold, $5,000 de minimis, penalty rates increased to 50% for gross misstatements and 30% otherwise).
• Authorizes Treasury to defer payment up to 5 years for taxpayers with severe liquidity constraints or undue hardship and requires rules within 12 months.
• Gives Treasury rulemaking power to block use of foreign corporations/partnerships/trusts to evade reporting, and requires a data-use/compliance plan and evaluation of cross-border enforcement effects.
• Authorizes $100 billion for the IRS for FY2027–2037: $70B enforcement, $10B taxpayer services, $20B IT modernization.
• Requires an initial report to Congress on administration and enforcement by Jan 1, 2029, and then biennial reports.
• Creates new compliance burdens and valuation disputes risk for wealthy taxpayers, and expands IRS enforcement capacity and resources.