Bipartisan Bill Would Allow Tax Deductions for Scam Victims
A bipartisan bill in the U.S. House of Representatives, the Tax Relief for Fraud Victims Act (H.R. 9500), aims to restore tax deductions for theft losses that were restricted under the Tax Cuts and Jobs Act of 2017 and made permanent by President Trump's 2025 law. Since 2018, scam victims (excluding investment fraud) have generally been unable to deduct losses unless from a declared disaster. The bill would eliminate these restrictions and waive the 10% early withdrawal penalty for victims who tapped retirement accounts. The House Ways and Means Committee approved the measure unanimously on July 1, 2026. The legislation comes as reported fraud losses hit a record $15.9 billion in 2025, a 430% increase since 2020, with older adults disproportionately affected by six-figure losses often involving retirement account cash-outs.
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