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Committee backs tax changes to help fraud victims, reinstating theft/casualty relief in key cases
Summary
Legislation (HR 9500) to let victims of scams claim casualty/theft-loss deductions and treat losses in the year they occurred (and provide relief for drained retirement accounts) was reported favorably after technical amendments; JCT estimated a multi‑billion-dollar budget impact over the next decade.
The Ways and Means Committee on (date not specified) reported HR 9500, the Tax Relief for Fraud Victims Act, after adopting an amendment in the nature of a substitute that reinstates certain pre‑2017 casualty-loss rules for thefts and provides special rules for retirement account distributions drained by fraud.
Representative Max Miller, sponsor of the bill, told the panel that growing technology-enabled fraud has produced tens of billions in losses and that the tax code should not "tax" victims for money stolen from them. Tom Bartold, staff of the Joint Committee on Taxation, explained the substitute would allow taxpayers to elect to treat a loss in the year the theft occurred and extend limitation periods for refunds; it also contains a special rule for foundation-damaging pyrite losses affecting principal residences. JCT staff estimated the proposal would reduce federal receipts by about $6.52 billion over fiscal years 2027–2036.
Members discussed retroactivity and whether the bill should reach earlier years; Rep. Panetta offered an amendment seeking broader retroactive relief but withdrew it after securing a commitment to pursue the issue on the floor.
Committee action: The committee agreed to the amendment in the nature of a substitute and then voted to report HR 9500 as amended to the House; the clerk recorded 39 yeas and 0 nays. Staff was authorized to make technical and conforming changes and members have two days to file supplemental views.
Next steps: The bill proceeds to the House with a reported budget estimate and with members indicating they will pursue additional changes on the floor, including possible retroactivity for certain victims.
