Sign in Subscribe
Legislative bills

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

Strategic Insights

— 2 min read

U.S. Senators Peter Welch (D-Vt.), Ashley Moody (R-Fla.), and Tammy Baldwin (D-Wis.) have introduced the Tax Relief for Victims of Crimes, Scams, and Disasters Act, a bipartisan legislation aimed at providing relief to those who have been victims of fraud, scams, thefts, accidents, and other personal casualty losses. The bill would reinstate the tax deduction for personal casualty and theft losses, ensuring that victims of scams, robberies, storms, and fires do not have to pay taxes on stolen assets and further wipe out their hard-earned savings and financial security. The Senators' bill would provide crucial financial relief to those victimized by scams and theft, allowing them to recover from their losses without being burdened by unnecessary tax obligations.

Key Takeaways:

  • The Tax Relief for Victims of Crimes, Scams, and Disasters Act would reinstate the tax deduction for personal casualty and theft losses, which was repealed in 2018.
  • The bill would ensure that victims of scams, robberies, storms, and fires do not have to pay taxes on stolen assets, providing crucial financial relief to those victimized by these crimes.
  • The legislation would provide retroactive coverage to taxpayers who suffered losses in the years following the repeal of the casualty and theft loss deduction.
  • Companion legislation would be introduced in the U.S. House by Representatives Jamie Raskin (D-MD-08) and Greg Steube (R-FL-17).
  • The legislation is endorsed by various organizations, including the AARP, The Elder Justice Coalition, and the Financial Services Institute.
  • In 2024, American taxpayers reported $16.6 billion in cyber fraud to the Federal Bureau of Investigation (FBI).
  • The average victim of elder fraud lost $83,000 between 2019 and 2021.
  • Scams and cyber thefts have become increasingly sophisticated in recent years, with the average loss per victim increasing by 26% between 2020 and 2022.
  • The bill would help victims of crimes and scams by allowing them to deduct their losses from their taxes without facing additional financial burdens.

Statistics:

  • $16.6 billion: The total amount of cyber fraud reported by American taxpayers in 2024.
  • $83,000: The average amount lost by victims of elder fraud in recent years.
  • 26%: The increase in the average loss per victim of elder fraud between 2020 and 2022.
  • 5 years: The recent increase in scams and cyber thefts, with the average loss per victim increasing significantly over this period.
  • 2023 and 2024: The years in which Vermont experienced catastrophic floods.
  • 2018: The year in which the Casualty and Theft Loss Deduction was repealed.

Sources:

  • United States Senator Peter Welch (D-Vt.)
  • United States Senator Ashley Moody (R-Fla.)
  • United States Senator Tammy Baldwin (D-Wis.)
  • Bob Blancato, National Coordinator of the Elder Justice Coalition
  • Dale Brown, President & CEO of Financial Services Institute
  • Erin Koeppel, Managing Director of Government Relations and Public Policy Counsel at CFP Board
  • Federal Bureau of Investigation (FBI)
  • AARP, The Elder Justice Coalition, and the Financial Services Institute

Read more