House Passes Suozzi-Led Bipartisan Bill to Protect Fraud Victims from Tax Penalties

September 15, 2026 Press Release H.R. 9500 restores the theft loss deduction removed in the 2017 TCJA The bill’s protections apply retroactively Washington, D.C. —The House today passed H.R. 9500, the Tax Relief for Fraud Victims Act, a bipartisan bill co-led by Congressman Tom Suozzi (D-NY) to ensure victims of fraud are not forced to pay taxes on the money scammers stole from them. This bill would restore the theft loss deduction for victims of scams and fraud, which was removed in the 2017 Tax Cuts and Jobs Act, allowing them to deduct qualifying losses from their taxes. It would also waive the 10% early withdrawal penalty charged to victims under age 60 who are forced to take money from their 401(k) or IRA as part of the fraud scheme. Importantly, the bill provides retroactive relief for victims who fell prey to scams up to five years ago while the deduction was restricted. “Americans are being scammed at unbelievable rates, and our seniors are especially vulnerable. Right now, victims of fraud and theft are hit twice: first by the scammer, and then by the IRS when they’re taxed on the money stolen from them,” said Congressman Suozzi. “The Tax Relief for Fraud Victims Act would right this wrong by ensuring victims are not taxed on the money they lost to scams, and provide essential retroactive relief for those who have already been saddled with tens of thousands of dollars in tax penalties on money they no longer have. I’m proud to have led this bipartisan, commonsense bill to restore the theft loss deduction and provide fraud victims the relief they deserve.” Fraud is increasingly costly for Americans. Consumers reported more than $15 billion in fraud losses to the Federal Trade Commission in 2025, a 25% increase from the year prior. The impact is particularly devastating for older Americans. AARP reports that four in ten older Americas have lost money to fraud, amounting to $7.7 billion in losses reported by people aged 60 and older in 2025—60% more than the previous year. These numbers are likely underreported, with the FTC estimating that Americans could be losing almost $200 billion to criminals each year. The Tax Relief for Fraud Victims Act recognizes this reality and would restore the theft loss deduction, waive the 10% early withdrawal penalty, and provide retroactive relief to ensure no victims of scams are unfairly penalized or taxed on the money stolen from them by scammers. Watch Congressman Suozzi’s floor remarks on the Tax Relief for Fraud Victims Act here . ###