Baldwin Proposal Providing Tax Relief for Victims of Scams and Disasters Passes House

WASHINGTON, D.C. – U.S. Senator Tammy Baldwin (D-WI) announced that the U.S. House of Representatives passed key provisions of her bipartisan Tax Relief for Victims of Crimes, Scams, and Disasters Act to provide tax relief to Americans who fall victim to financial scams or natural disasters. The proposal eliminates the “scam tax,” which taxes Americans on income or assets stolen from them, even if they no longer possess those funds, by reinstating the Nonbusiness Casualty and Theft Loss Deduction for 2026. The proposal also includes retroactive relief for victims scammed between 2021 and 2025. “If you’ve been scammed out of your hard-earned savings or lost everything in a disaster, you shouldn’t then get stuck with a tax bill for money you don’t have,” said Senator Baldwin. “It’s just plain wrong, and I’m proud that our commonsense proposal passed the House and is one step closer to giving victims the relief they deserve.” The Nonbusiness Casualty and Theft Loss Deduction was eliminated in 2018, forcing survivors of scams and natural disasters to pay taxes on their financial losses. The provisions were passed as part of legislation led by Representative Tom Suozzi (D-NY-03). Full text of the bill is available here. ###