S. 5204 – SMART Savings Act of 2026

AI-Generated Summary

Updated August 6, 2026 at 2:51 AM UTC

The SMART Savings Act changes the tax code to let individual retirement account plans, such as certain trusts and tax‑exempt plans, be excluded from some prohibited‑transaction rules. It updates the definition of a “plan,” removes several specific prohibited‑transaction provisions, and adjusts related language, while still keeping rules that prevent self‑dealing. The changes take effect for transactions after the law is enacted and affect individuals who hold retirement accounts.

Key Provisions

Redefines “plan” to include trusts under section 401(a) and plans under section 403(a) that are tax‑exempt under section 501(a), thereby exempting those individual account plans from the prohibited transaction rules in section 4975(e)(1).
Removes paragraphs (3)‑(6) of section 4975(c) and renumbers paragraph (7) as (3), eliminating several prohibited‑transaction restrictions for the exempted plans.
Amends section 4975(f)(8) by deleting clause (ii) and renumbering clause (iii) as (ii), further aligning the code with the exemption.
Preserves self‑dealing prohibitions by updating section 408(e)(2)(A) to define “relationship benefits” and state that any self‑dealing causes the account to lose its IRA status.

Legislative Activity

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1 earlier action

SenateIntro Referral Latest Action

Read twice and referred to the Committee on Finance. (text: CR S4390)

Finance Committee

July 30, 2026

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SenateIntro Referral

Introduced in Senate

July 30, 2026

SenateIntro Referral

Read twice and referred to the Committee on Finance. (text: CR S4390)

Finance Committee

July 30, 2026

Floor Debate

3 members

What members said about S. 5204 on the floor

1 Republican2 Democrats

Sen. Charles E. SchumerD-NY · Jul 30, 2026

Mr. President, now, today, on anti-corruption and the Anti-Corruption Bureau Creation Act--today, I am introducing the Anti- Corruption Bureau Creation Act, the biggest, boldest, and broadest…

Mr. President, now, today, on anti-corruption and the Anti-Corruption Bureau Creation Act--today, I am introducing the Anti- Corruption Bureau Creation Act, the biggest, boldest, and broadest proposal ever put forward to revitalize our anti-corruption institutions.

The scope and scale of Donald Trump's corruption dwarf anything we have ever seen in American history, which is why Congress has to respond more strongly than ever before. In just 18 months, the Trump family has cashed in on the influence of the Presidency to the tune of more than $4 billion--billion.

The same corrupt practices that Trump is using to rake in billions are also causing Americans to pay an extra $3,100 in higher costs each year. Trump profits; Americans pay. Our ``Grifter in

Chief'' has tried every scam in the book and invented new ones we never imagined.

The bill I am introducing today with my colleagues Senators Padilla, Merkley, and Kim is designed to stop Trump's ``Art of the Steal.''

The first goal of our bill is to get the American people their money back. The bill will create, for the first time, a private right of action that allows Americans, including State attorneys general representing the public, to sue to recover the money Trump and his family have taken from them.

Now, the False Claims Act already allows citizens to file lawsuits against people who defraud the government and share part of the civil penalty if they win. So it only makes sense that we are expanding that ability so citizens can sue people who use government influence to defraud the public. If Donald Trump or one of his lackeys, sons, cronies uses government influence to steal from you, you deserve your day in court.

The second goal of our bill is to stop this corruption from happening again. Instead of draining the swamp, Trump blew our anti-corruption institutions to smithereens. He installed MAGA loyalists at the Office of Government Ethics and the U.S. Office of Special Counsel, watchdogs whose whole mission is to stop the same type of corruption Trump is now committing. Trump also neutered the Federal Elections Commission, which Congress created to stop the corruption Watergate exposed.

My bill would establish a new, independent Anti-Corruption Bureau that brings all the guardrails Trump has weakened under one roof. The Anti-Corruption Bureau is a sum greater than its parts. The Bureau would have subpoena power to give it real investigative strength, meaningful enforcement authority, and the ability to disgorge ill- gotten gains. We want to create a one-stop shop to catch the corruption and make them pay up, an Agency with real teeth and real independence.

It will be led by seven Senate-confirmed Commissioners--three Republicans, three Democrats, and one Independent.

Trump won't be able to commandeer the Bureau because our bill explicitly outlaws trying to weaponize it, with fines and jail time for people who try.

Congress can't defund the Bureau because our bill establishes a self- sustaining funding source for the Agency, much like the Fed.

And the President can't dismantle the Bureau by purging its members, since our bill requires a panel of judges to appoint temporary replacements so the Bureau always has a quorum.

The bill is just common sense--a basic, straightforward way to make sure all facets of government serve the people and no one else.

Americans are demanding we go back to a government they can actually trust. This legislation tells them that we hear them and that we are going to fight for them with the strongest measures we have ever proposed.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Sen. Richard J. DurbinD-IL · Jul 30, 2026

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Sen. John BarrassoR-WY · Jul 30, 2026

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Sen. John BarrassoR-WY · Jul 30, 2026

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Bill Text

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Introduced in SenateIssued July 30, 2026

II

119th CONGRESS

2d Session

S. 5204

IN THE SENATE OF THE UNITED STATES

July 30, 2026

Mr. Barrasso (for himself and Mrs. Blackburn) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to exempt individual account plans from certain prohibited transaction rules.

1.

Short title

This Act may be cited as the Simplifying Modern Access to Retirement Tools for Savings Act of 2026 or the SMART Savings Act of 2026.

2.

Exemption from prohibited transaction rules

(a)

In general

Paragraph (1) of section 4975(e) of the Internal Revenue Code of 1986 is amended to read as follows:

(1)

Plan

For purposes of this section, the term plan means a trust described in section 401(a) which forms a part of a plan, or a plan described in section 403(a), which trust or plan is exempt from tax under section 501(a).

.

(b)

Conforming amendments

(1)

Section 4975(c) of the Internal Revenue Code of 1986 is amended—

(A)

by striking paragraphs (3), (4), (5), and (6), and

(B)

by redesignating paragraph (7) as paragraph (3).

(2)

Section 4975(f)(8)(E) of such Code is amended by striking clause (ii) and by redesignating clause (iii) as clause (ii).

(c)

Preservation of self-Dealing prohibitions

Section 408(e)(2)(A) of the Internal Revenue Code of 1986 is amended to read as follows:

(A)

In general

(i)

Self-dealing

If, during any taxable year of the individual for whose benefit any individual retirement account is established, that individual or the individual's beneficiary deals with the income or assets of a plan in the individual's own interest or for the individual's own account or receives consideration for the individual's own personal account from any party dealing with the plan in connection with a transaction involving the income or assets of the plan, other than the receipt of any relationship benefits, such account ceases to be an individual retirement account as of the first day of such taxable year. For purposes of this paragraph—

(I)

the individual for whose benefit any account was established is treated as the creator of such account,

(II)

the separate account for any individual within an individual retirement account maintained by an employer or association of employees is treated as a separate individual retirement account, and

(III)

each individual retirement plan of the individual shall be treated as a separate contract.

(ii)

Relationship benefits

For purposes of clause (i), the term relationship benefits means reduced cost or no-cost products or services or enhanced or improved products or services or other benefits received by a person pursuant to an arrangement in which the account value of, or the fees incurred for services provided to, an individual retirement account are taken into account for purposes of determining eligibility to receive such benefit.

.

(d)

Effective date

The amendments made by this section shall apply to transactions occurring after the date of the enactment of this Act.