H.R. 10891: Scams Tax Relief Act

This bill would change federal income tax rules for people who lose money because of scams or other dishonest conduct. In plain terms, it would let taxpayers claim a deduction for certain theft losses involving fraud, deceit, or misrepresentation, even if the loss did not happen during a federally declared disaster.

What changes

• Under current law, some theft-loss deductions are limited, especially outside of disaster situations.
• This bill would expand the types of losses that can qualify for a deduction to include losses from theft involving fraud, deceit, or misrepresentation, as defined by the Treasury Secretary.
• It would also allow these deductions even if the taxpayer does not itemize deductions on their tax return.

Who could be affected

• People who lose money to scams, fraudulent schemes, or similar dishonest conduct could be able to reduce their taxable income for the amount of the loss, if they meet the bill’s requirements.
• Taxpayers who use the standard deduction, rather than itemizing, would also be able to benefit.

Timing

• The changes would apply only to losses sustained after the bill is enacted.

Relevant Companies

None found