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Tax relief for victims of coerced debt and identity theft.

This bill protects individuals who are victims of coerced debt or identity theft from having to pay income tax on the forgiven debt amount. Normally, discharged debt is treated as taxable income, but this change excludes debt that a court has relieved the victim of due to coercion, fraud, or economic abuse. This ensures that victims are not burdened with an additional financial liability after being freed from the debt.
Key points
The forgiveness of debt resulting from coercion, fraud, identity theft, or economic abuse will not be counted as taxable income.
This change applies to individuals who have been relieved of liability for the debt pursuant to a court judgment.
The law applies to debt discharges occurring after December 31, 2023, and imposes no new reporting requirements on victims.
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Expired
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Additional Information
Print number: 118_S_4801
Sponsor: Sen. Smith, Tina [D-MN]
Process start date: 2024-07-25
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Summarized by: gemini-flash-latest
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Tax Relief for Coerced Debt Act of 2024

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 118_S_4801.

Which chamber initiated this legislation?

This legislation was initiated in the Senate.

When did the legislative process begin?

The process officially started on 2024-07-25.

What are the main provisions?

Key points include:

  • The forgiveness of debt resulting from coercion, fraud, identity theft, or economic abuse will not be counted as taxable income.
  • This change applies to individuals who have been relieved of liability for the debt pursuant to a court judgment.
  • The law applies to debt discharges occurring after December 31, 2023, and imposes no new reporting requirements on victims.
What is the specific legal status?

The current status is Expired.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Sen. Smith, Tina [D-MN].

What is the latest detailed status?

The latest detailed status is: Introduced in Senate

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-26.

CATEGORIES

Taxes Family Courts and Law