Tax Relief for Victims of Crimes, Scams, and Disasters Act Introduced in Senate

Strategic Insights -

United States Senators Tammy Baldwin (D-WI), Ashley Moody (R-FL), and Peter Welch (D-VT) have introduced legislation to provide relief to victims of fraud, scams, thefts, accidents, and other personal casualty losses. The Tax Relief for Victims of Crimes, Scams, and Disasters Act reinstates the tax deduction for personal casualty and theft losses and ensures that victims of scams, robberies, storms, and fires do not have to pay taxes on stolen assets. This legislation aims to provide critical financial relief to those who have been financially devastated by scams and theft.

Key Takeaways:

  • The Tax Relief for Victims of Crimes, Scams, and Disasters Act reinstates the tax deduction for personal casualty and theft losses.
  • The legislation ensures that victims of scams, robberies, storms, and fires do not have to pay taxes on stolen assets.
  • The bill provides retroactive coverage to taxpayers who suffered losses since 2017 and allows them to file an amended tax return.
  • The legislation is endorsed by the AARP, The Elder Justice Coalition, the National Association of Consumer Advocates, and other organizations.
  • Senator Baldwin introduced this legislation in 2023 after hearing the story of a Wisconsin woman who was scammed out of her entire savings, investments, and 401(k), totaling over $200,000.
  • The average victim of elder fraud lost $83,000 in 2024.
  • In 2024 alone, American taxpayers reported $16.6 billion in cyber fraud to the FBI.
  • The legislation is aimed at providing critical financial relief to those who have been financially devastated by scams and theft.

Statistics:

  • $16.6 billion: The amount reported in cyber fraud by American taxpayers to the FBI in 2024.
  • $83,000: The amount lost by the average victim of elder fraud in 2024.
  • 2023 and 2024: The years when Vermont experienced catastrophic floods.
  • 2018: The year when the federal government removed the Casualty and Theft Loss Deduction provision.
  • $200,000: The amount scammed from one Wisconsin woman, who was forced to pay over $15,000 in taxes.

Sources:

  • United States Senator for Wisconsin Tammy Baldwin (D-WI)
  • United States Senator for Florida Ashley Moody (R-FL)
  • United States Senator for Vermont Peter Welch (D-VT)
  • Representative Jamie Raskin (D-MA-08)
  • Representative Greg Steube (R-FL-17)
  • The Elder Justice Coalition
  • The Financial Services Institute (FSI)
  • CFP Board
  • National Association of REALTORS
  • American Institute of CPAs (AICPA)
  • AARP