Matz Featured on Disparate Treatment in Trump Account Contributions

Kevin said that while it may sound like a technical nuance, the practical implications are significant. 

“The IRS received about 300,000 Form 709 gift tax returns in fiscal 2025,” Kevin said. “In contrast, because nearly 6 million elections to open Trump accounts have already been received, the number of gift tax returns filed annually could have exploded to several million.” 

Kevin added that though the IRS’ latest guidance will prevent that explosion, it still doesn’t cover all Trump account contributions.

Since Trump account contributions are structured as taxable gifts, the funds are inaccessible to the child until age 18, making the contributions “future interest” gifts under the tax code. This triggers taxation that must be reported on a Form 709 gift tax return. 

Kevin said that Congress did not intend to make Trump account contributions taxable future interest gifts that could not be counted as part of a taxpayer’s annual gift tax exclusion. Thus, the IRS released Revenue Procedure 2026-25 and its gift tax waiver or “safe harbor.”

“It’s undeniably helpful for taxpayers who fit within the scope of the revenue procedure, because it is complex and expensive to prepare Form 709,” he said. “However, the policy unfortunately creates two different treatments of Trump account contributions, depending on what situation the taxpayer is in.”

Kevin said that based on the original statutory language adopted by Congress, the US Treasury Department and the IRA likely did not believe they had the authority to bestow across-the-board relief. The only way to ensure Trump account contributions are treated equally is for Congress to make a technical correction to the statute.

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