H.R. 9500 · Passed House · Taxation

Tax Relief for Fraud Victims Act

Sponsor: Max L. Miller (R-OH)

What it does

• Eliminate the requirement that personal casualty and theft losses must arise from a federally or state-declared disaster to qualify for a tax deduction.
• Allow taxpayers to claim a tax deduction for fraud-related theft losses in the tax year the loss occurs, rather than waiting until the year it is discovered.
• Extend the refund claim deadline for fraud-related theft loss deductions to at least one year after the loss is discovered and remove restrictions on refund amounts.
• Waive the 10% early-withdrawal penalty on distributions from qualified retirement plans used to recover from fraud-related theft losses and extend the refund claim deadline for such distributions.

Official summary

Tax Relief for Fraud Victims Act This bill expands the federal tax deduction for personal casualty and theft losses by eliminating certain limits, including the requirement that such losses arise from certain disasters. The bill also extends the tax refund deadline and modifies certain retirement plan rules related to certain fraud losses. The bill repeals the limit on the federal tax deduction for personal casualty losses (not attributable to a trade, business, or transaction entered into for profit) that allows such losses only if arising from a federal or state declared disaster or to the extent that such losses offset personal casualty gains. The bill allows taxpayers to elect to claim a tax deduction for losses arising from a theft involving fraud, deceit, or misrepresentation in the tax year such losses occur (rather than in the tax year discovered). Further, the bill extends the deadline for a refund claim related to a tax deduction for such losses to no less than one year after the date on which the losses are discovered and eliminates certain restrictions on the amount of such refund. For early distributions from a qualified retirement plan arising from a theft loss…

Latest action

Sep 16, 2026: Received in the Senate and Read twice and referred to the Committee on Finance.

Committee: Senate Finance