Baldwin, Welch Introduce Legislation to Give Relief to Victims of Fraud, Scams, Theft, and Disasters
Baldwin bill would bring back law to ensure victims of frauds and scams aren’t hit with additional tax bill; One Wisconsin woman is facing a $15,000 tax bill after being scammed more than $200,000
WASHINGTON, D.C. – Today, U.S. Senators Tammy Baldwin (D-WI) and Peter Welch (D-VT) introduced the Tax Relief for Victims of Crimes, Scams, and Disasters Act, legislation to give relief to those who have been victims of fraud, scams, thefts, accidents, and other personal casualty losses. The legislation reinstates the tax deduction for personal casualty and theft losses and ensures 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.
Reporting has revealed a pattern of Americans ending up with a tax bill after losing money through scams, thefts, and other similar events. One Wisconsin woman reported being scammed out of her entire savings, investments, and 401(k), more than $200,000 in total, and is now being forced to pay more than $15,000 in taxes.
Without a reinstatement of the casualty and theft loss deduction, Americans who are victims of theft and non-federally declared disasters will continue to face hefty federal tax bills that the IRS is obligated to enforce.
The Tax Relief for Victims of Crimes, Scams, and Disasters Act:
- Reinstates the tax deduction for personal casualty loss that was available prior to the Tax Cuts and Jobs Act and provides retroactive coverage to taxpayers who suffered losses in the years that followed.
- Ensures that victims who suffered losses since 2017 are able to file an amended tax return accounting for the personal casualty loss.
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