Bipartisan Bill Would Allow Tax Deductions for Scam Victims, Waive Penalties
A bipartisan bill in the U.S. House, the Tax Relief for Fraud Victims Act (H.R. 9500), aims to restore tax deductions for theft losses that were restricted since the 2017 Tax Cuts and Jobs Act. The measure, approved unanimously by the House Ways and Means Committee on July 1, would allow victims of scams such as impersonator and romance fraud to deduct stolen money on their tax returns. It would also waive the 10% early withdrawal penalty for victims under 59½ who tapped retirement accounts due to fraud. The bill comes as FTC data shows fraud losses hit a record $15.9 billion in 2025, a 430% increase since 2020, with older adults disproportionately affected. Currently, only investment fraud losses are deductible under an IRS memo, leaving other scam victims unable to claim deductions and potentially owing taxes on stolen funds.
Editorial responsibility
- No named human review is recorded for this page.
- Reports are grouped by semantic similarity and deterministic rules. Language models may assist titles, summaries, translation and cross-source analysis; the page itself is projected from evidence records.
- Current automated evidence projection