Tax Relief for Fraud Victims Act: Restoring Deductions and Relief for Fraud Losses
This bill repeals the limitation on deductions for personal casualty losses, allowing taxpayers to deduct property losses not related to a federally declared disaster. It specifically aids victims of theft involving fraud, deceit, or misrepresentation by allowing them to elect the tax year in which to treat the loss as sustained and by extending the statute of limitations for refund claims. Furthermore, it waives the 10% early withdrawal penalty on retirement plan distributions related to such fraud losses.
Key points
Repeals the limitation that restricted personal casualty loss deductions (e.g., property damage) only to federally declared disasters.
Allows victims of theft involving fraud, deceit, or misrepresentation to choose whether to treat the loss as sustained in the year it occurred or the year it was discovered.
Waives the 10% penalty on early distributions from qualified retirement plans if the distribution relates to a theft loss involving fraud or deceit.
Status:
Introduced
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