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119-hr-6999119th CongressWALLET

Tax Relief for Fraud Victims Act

Sponsored By: Representative Miller, Max L. [R-OH-7]

Introduced

Summary

This bill would expand tax relief for victims of theft and fraud. It changes when theft losses count for tax purposes, removes a limitation on personal casualty loss deductions, and lengthens the time to file related refund and repayment claims.

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  • Families and individual taxpayers would get two timing options for theft losses. The general rule treats a theft loss in the year the taxpayer discovers it, and for thefts involving fraud taxpayers could elect to treat the loss as sustained in the year it occurred. The bill also repeals a statutory constraint on personal casualty loss deductions.
  • People seeking refunds or credits for fraud-related theft losses would get more time to file. The claim period could not expire earlier than one year after discovery and section 6511(b)(2) would not shorten that period.
  • Retirement savers who took distributions because of theft losses tied to fraud would be allowed to repay those distributions under similar rules with a one-year repayment window starting the day after discovery. Refund claims for those distributions would also get the extended one-year filing period.

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 3 benefits, 0 costs, 0 mixed.

More casualty loss tax relief

If enacted, for tax years beginning after Dec 31, 2025, the bill would remove the statutory limit on personal casualty loss deductions. If you had a big loss from a fire, storm, or similar event, you would be able to deduct more of that loss on your tax return. This could lower your taxable income if you had large casualty losses.

New timing rule for theft losses

The bill would treat a theft loss as sustained in the year you discover it. If the theft involved fraud, deceit, or misrepresentation (as defined by the Secretary), you would be able to elect to treat the loss as sustained in the year the loss occurred. These timing rules would apply to tax years beginning after Dec 31, 2025.

Repayment rules for fraud-related distributions

The bill would treat distributions tied to deductible theft losses involving fraud as covered distributions for repayment and refund rules. You would be able to repay such distributions within 1 year after you discover the loss, using rules like current repayment rules but with a 1-year window. For refund or credit claims tied to those distributions, the filing period would not end earlier than 1 year after discovery, and section 6511(b)(2) would not apply. These rules would apply to distributions made after Dec 31, 2025.

Sponsors & CoSponsors

Sponsor

Miller, Max L. [R-OH-7]

OH • R

Cosponsors

  • Rep. Suozzi, Thomas R. [D-NY-3]

    NY • D

    Sponsored 1/9/2026

Roll Call Votes

No roll call votes available for this bill.

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