IRS chief sets 70 million-child goal for Trump Accounts

The IRS official leading the expansion of Trump Accounts wants the new child investment program to reach far beyond its early sign-ups. For families, the pitch is a tax-favored account for kids that may come with government, employer or philanthropic money attached.

Frank Bisignano, the IRS CEO who has been tapped to lead the rollout, said Thursday on CNBC’s “Squawk Box” that the goal is to get 70 million children under 18 into Trump Accounts.

“We have the ability to enroll people very simply, and I think the objective is to have 70 million children under 18 to have a Trump Account,” Bisignano said on CNBC.

Families had enrolled 6.5 million children as of July 10, according to a U.S. Treasury Department tally cited by CNBC. Bisignano said the program should ultimately reach every family.

How the accounts are being pitched

Trump Accounts are tax-deferred investment accounts for children. Tax-deferred means investment gains are not taxed each year as they build up, with taxation generally pushed to a later point under the account’s rules.

Bisignano said enrollment could become easier if the government works through companies families already use. He told CNBC he has spoken with chief executives at tax-preparation companies about whether they can help distribute Trump Accounts. He also pointed to banks as another possible channel.

“It’s a technology business, really, and I think we’re going to make it simple for people to enroll,” Bisignano said.

That distribution question matters for uptake. A financial account can be attractive on paper, but families still have to know it exists, understand who qualifies and complete the sign-up process. Tax software firms and banks could put the option in front of households during moments when they are already handling financial paperwork.

Incentives could drive more sign-ups

Bisignano also cited several financial incentives that he said could help increase participation. Those include $1,000 in federal seed money for babies born from 2025 through 2028. Seed money is an initial contribution meant to get an account started.

He also mentioned employer matching funds and grants from philanthropists such as Michael and Susan Dell. A match means another party contributes money based on eligible contributions or program rules, increasing the amount going into the account.

“This is why I’m so confident about the 70 million ultimately,” Bisignano said, referring to those incentives.

Another route under discussion is automatic creation of accounts. Earlier this month, Altimeter Capital CEO Brad Gerstner, who CNBC said helped spearhead Trump Accounts, said on the network that he hoped the government would work with the Social Security Administration to automatically create accounts for eligible children.

“I hope that over the course over the next few months we are going to be auto-creating, with the Social Security Administration, 70 million accounts for every kid under the age of 18,” Gerstner said on CNBC.

Bisignano also serves as commissioner of the Social Security Administration, according to CNBC. His comments suggest the next phase of Trump Accounts will focus less on whether the program exists and more on how quickly officials and private-sector partners can get families enrolled.

This story draws on original reporting from CNBC.