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119-s-5395119th CongressWALLET

Survivor Justice Tax Prevention Act

Sponsored By: Senator Cortez Masto, Catherine [D-NV]

Introduced

Summary

Makes damages paid for sexual acts or sexual contact tax-free. This bill would expand the tax exclusion so payments tied to sexual acts or sexual contact would not count as gross income and would ease proof rules in tax disputes.

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  • Survivors: People who receive settlements, judgments, or awards for sexual acts or sexual contact would not have to include those amounts in gross income.
  • No medical-records rule: The exclusion covers those damages whether or not there are medical records or observable injuries.
  • Proof in tax disputes: If a decision or agreement states damages are for a sexual act or sexual contact, that statement would be treated as credible evidence for purposes of section 7491(a) and would satisfy the taxpayer proof rule in section 7491(a)(2).
  • Timing: The change would apply only to decisions and agreements made after enactment. A decision counts as made if the first payment is received after enactment, and agreements that only replace older ones are not treated as new.
  • Public awareness: The Treasury, in consultation with the Justice Department Office on Violence Against Women and other federal agencies, would run a program to publicize the exclusion.

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 2 benefits, 0 costs, 1 mixed.

Tax-free payouts for sexual assault survivors

If enacted, you could exclude money you get for any sexual act or sexual contact from your gross income. Punitive damages would not be excluded. The rule would apply even if there are no medical records or visible injuries. The bill would also make clear that this change should not be read to change the old rule about physical injuries without medical records.

Easier tax proof for survivor settlements

If enacted, a settlement or judgment that says the damages were for a sexual act or sexual contact would be treated as credible evidence in IRS disputes. You would be treated as meeting certain tax proof rules about whether those damages are tax-free. This would reduce the taxpayer's evidentiary burden when contesting taxability of such damages.

Effective date and outreach for survivors

If enacted, the new rules would apply only to amounts paid under decisions and agreements after the date of enactment. A decision would count as after enactment if its first payment is received after enactment. An agreement that merely replaces or revises an older agreement would not count as entered into after enactment. The Treasury would run a public awareness program, in consultation with the Justice Department's Office on Violence Against Women, to inform survivors and tax advisers about the exclusion.

Sponsors & CoSponsors

Sponsor

Cortez Masto, Catherine [D-NV]

NV • D

Cosponsors

  • Sen. Young, Todd [R-IN]

    IN • R

    Sponsored 9/15/2026

Roll Call Votes

No roll call votes available for this bill.

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