WASHINGTON, DC —Congressman Jamie Raskin (MD-08) led a bipartisan group of Members of Congress in introducing legislation to provide tax relief for Americans who have fallen victim to scams, disasters and other personal losses. Joining Rep. Raskin are Reps. Greg Steube (FL-17), Jimmy Panetta (CA-19), Mike Ezell (MS-04), Jim McGovern (MA-02), and Mario Díaz-Balart (FL-25).
The Tax Relief for Victims of Crimes, Scams, and Disasters Act restores the Casualty and Theft Loss Deduction for taxpayers between 2018 and 2025. This relieves scam victims of a tax burden on income they no longer have and helps families rebuild their homes and lives after a disaster.
“When Americans fall victim to dreadful scams at the hands of criminals, fraudsters and hucksters, they shouldn’t be revictimized by the IRS,” said Rep. Raskin. “This legislation was inspired by one of my constituents who was defrauded of her entire retirement savings and then faced a hefty tax bill. I’m grateful to my colleagues, on both sides of the aisle, who are joining together to make our tax code fairer for all.”
“It’s outrageous that victims of scams, fraud, or disaster are being punished by the IRS for something that wasn’t their fault,” said Rep. McGovern. “Whether it’s a family in Massachusetts whose home is falling apart because of a defective, crumbling foundation, or a senior who lost their life savings to a scammer, they deserve relief—not a tax bill. This bipartisan bill is about basic fairness. It restores a commonsense tax deduction that helps people rebuild after hardship and gives them one less thing to worry about when they’re already going through hell. I’m proud to support it.”
“Right now, seniors who are scammed out of their life savings are forced to pay federal taxes on money they no longer have, simply because of a flaw in the tax code,” said Rep. Panetta. “The Tax Relief for Victims of Crimes, Scams, and Disasters Act would restore a key deduction that helps scam victims recover financially. This bipartisan solution ensures that victims, especially vulnerable seniors, aren’t punished twice and can focus on rebuilding their lives.”
Until 2018, the federal government allowed victims of crimes and unexpected, uninsurable disasters to deduct this lost income from their taxes by claiming the Casualty and Theft Loss Deduction. Today, scam victims and homeowners are on the hook for tens or hundreds of thousands of dollars in federal taxes unless their misfortunes meet a narrow set of criteria.
Rep. Raskin initially introduced the bill in the 118th Congress after a retiree in his district who had $655,000 stolen from her retirement account, leaving her with a 2022 tax liability of more than $148,000. This bill will also provide relief to victims of non-federally declared disasters. Nearly half of the nation’s billion-dollar disasters in the past 45 years have struck communities across the United States since personal loss tax deductions were limited in 2017.
According to the FBI’s 2024 Internet Crime Complaint Center (IC3) Elder Fraud Report, scams targeting individuals aged 60 and older caused over $4.885 billion in losses in 2024—an increase of approximately 43% in just one year. The average victim of elder fraud lost $83,000 from predatory fraud schemes in 2024.
The Tax Relief for Victims of Crimes, Scams, and Disasters Act is endorsed by AARP, AICPA-CIMA, AMAC Action, American Land Title Association, Aspen Institute Financial Security Program, CFP Board, Elder Justice Coalition, Family Business Coalition, Financial Services Institute, Investment Adviser Association, National Association of Consumer Advocates, National Association of Enrolled Agents, National Association of Government Defined Contribution Administrators (NAGDCA), National Association of REALTORS® and Operation Shamrock.
Read the full legislation here.
###