Tax Relief for Victims of Crimes, Scams, and Disasters Act
- Bill Number
- S. 1773
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-05-15: Read twice and referred to the Committee on Finance.
- Last Updated
- 2026-06-25T12:18:23Z
AI-Generated Summary
Purpose
The "Tax Relief for Victims of Crimes, Scams, and Disasters Act" (S. 1773) aims to restore tax deductions for personal losses caused by casualties, such as theft, scams, or natural disasters. This reverses a limitation from the 2017 Tax Cuts and Jobs Act, allowing individuals to reduce their taxable income for these losses, providing financial relief to affected taxpayers.
Key Provisions
- Reinstatement of Deduction: Amends Section 165(h) of the Internal Revenue Code by removing paragraph (5), which had restricted personal casualty loss deductions to only those from federally declared disasters. Now, deductions are available for losses from any sudden, unexpected, or unusual events, like fires, storms, thefts, or scams.
- Retroactive Application: The change applies to tax years beginning after December 31, 2017, meaning it covers losses from 2018 onward.
- Extended Refund Claims: For tax returns filed before January 1, 2025, where the deduction was unavailable due to the prior suspension:
- Extends the deadline (statute of limitations) for filing refund claims until the due date for the tax return in the year the law is enacted (including any extensions).
- Waives the usual limit on refund amounts for these claims.
- Limits this extension to claims specifically tied to personal casualty losses under Section 165(c)(3).
Significant Changes to Existing Law
- Reverses the 2017 Tax Cuts and Jobs Act (Public Law 115-97), which suspended personal casualty loss deductions except for qualified disaster areas, effectively broadening eligibility for deductions.
- Introduces retroactive relief by allowing past claims, which were previously barred, to address overpayments from earlier tax years.
Potential Impacts
- On Citizens: Provides tax relief to individuals who suffered personal losses (e.g., from home burglaries, identity theft scams, or non-declared disasters), potentially reducing their tax bills or enabling refunds. This could ease financial burdens for victims of crimes or unforeseen events.
- On Government Agencies: The Internal Revenue Service (IRS) may face increased administrative workload from processing retroactive refund claims and verifying more deductions, potentially leading to higher costs and a temporary revenue dip for the federal government.
- On International Relations: No direct impacts, as the bill focuses on domestic tax policy.
Main Stakeholders Affected
- Taxpayers and Victims: Primary beneficiaries, including individuals and families who experienced personal casualty losses since 2018, such as crime victims, scam targets, or those affected by local disasters.
- Internal Revenue Service (IRS): Responsible for implementing the changes, handling claims, and auditing deductions.
- U.S. Treasury Department: Affected by potential reductions in tax revenue due to expanded deductions and refunds.
- Congress and Advocacy Groups: Lawmakers (introduced by Senators Baldwin, Moody, and Welch) and organizations supporting disaster or crime victim relief may influence or monitor enforcement.
Notable Legal, Constitutional, or Political Implications
- Legal: The retroactive application could raise questions about fairness in tax law, but the bill explicitly addresses this by extending statutes of limitations (normally 3 years for refunds under Section 6511), avoiding constitutional challenges related to due process or ex post facto concerns in civil tax matters.
- Constitutional: No major issues anticipated, as tax code amendments are within Congress's broad authority under Article I, Section 8 to levy taxes.
- Political: Signals bipartisan support for victim relief (introduced across party lines), potentially appealing to constituents in disaster-prone or high-crime areas. It may increase federal spending pressures if deductions reduce revenue significantly, influencing future budget debates.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (7)
Sen. Moody, Ashley [R-FL], Sen. Welch, Peter [D-VT], Sen. Justice, James C. [R-WV], Sen. Gillibrand, Kirsten E. [D-NY], Sen. Scott, Rick [R-FL], Sen. Whitehouse, Sheldon [D-RI], Sen. Sullivan, Dan [R-AK]
Recent Actions
- 2025-05-15: Read twice and referred to the Committee on Finance.
- 2025-05-15: Introduced in Senate
Bill Versions
- Tax Relief for Victims of Crimes, Scams, and Disasters Act — issued 2025-05-15 — PDF (3 pages)