After 2017 GOP bill gutted it, Welch and Baldwin bill would bring back law to ensure victims of frauds and scams aren’t hit with additional tax bill

Bill Comes in Response to Constituent Outreach on Scammer Targeting Retirement Account in Vermont

WASHINGTON, D.C. – Today, U.S. Senators Peter Welch (D-Vt.) and Tammy Baldwin (D-Wis.) introduced the Tax Relief for Victims of Crimes, Scams, and Disasters Act, legislation to give relief to those who have been victims of fraud, scams, thefts, accidents, and other personal casualty losses. The legislation reinstates the tax deduction for personal casualty and theft losses that were stripped away by the 2017 GOP tax law, forcing victims of scams, robberies, storms, and fires to pay taxes on stolen assets, further wiping out their hard-earned savings and financial security.  

“It’s outrageous that folks scammed out of their life’s savings are hit with large tax bills. It’s even more outrageous that Republicans decided to get rid of this crucial tax benefit for scam victims, just to turn around and give the ultra-wealthy and big corporations more tax breaks,” said Senator Welch. “I’m proud to introduce this bill to reinstate this important tax deduction–which never should have been repealed in the first place–to provide crucial financial relief to those victimized by scams and theft.” 

“Our tax code should be making sure big corporations and the wealthy are paying their fair share, not punishing Wisconsinites who already have been ripped off by a scam or theft,” said Senator Baldwin. “I’ve heard stories from Wisconsinites who have been victims of financial fraud, lost their hard-earned retirement savings, and then are slapped with an unexpected tax bill. I voted against the 2017 tax bill that created this nightmare, and now, I’m working to right this wrong to provide much-needed relief to those who are already facing dire circumstances.”   

As a member of the U.S. House of Representatives, Senator Welch voted against the 2017 GOP tax bill—the Tax Cuts and Jobs Act—which gave massive tax cuts to corporations while making low- and middle-class Americans foot the bill and repealed a tax deduction previously available to victims of scams, thefts, accidents, and other property casualty losses. In turn, reporting has revealed a pattern of Americans ending up with a tax bill after losing money through scams, thefts, and other similar events.  

The Tax Relief for Victims of Crimes, Scams, and Disasters Act:  

• Reinstates the tax deduction for personal casualty loss that was available prior to the Tax Cuts and Jobs Act and provides retroactive coverage to taxpayers who suffered losses in the years that followed.  
• Ensures that victims who suffered losses after the 2017 law are able to file an amended tax return accounting for the personal casualty loss.  

###