Support Tax Relief for Victims of Crime and Scams
Operation Shamrock urges strong support for bipartisan legislation to prevent taxation on stolen funds.
Operation Shamrock has authored a letter of support for the reintroduction of the bipartisan Tax Relief for Victims of Crimes, Scams, and Disasters Act (S.3776 and H.R. 6938).
Originally introduced in 2024, the bill would reinstate the tax deduction for personal casualty losses that were in effect prior to the enactment of the “Tax Cuts and Jobs Act of 2017.” Since 2018, many fraud victims have been taxed on funds stolen from their taxable accounts, retirement savings, investment withdrawals, or coerced financial transfers.
This legislation addresses critical gaps that scammers and transnational criminal organizations currently exploit, and we believe it will have a tangible, positive impact on protecting Americans from these emerging threats. Specifically, the bill:
“Without a reinstatement of the deduction, Americans who are victims of theft will continue to face hefty federal tax bills that the IRS is obligated to enforce.”
Reinstates the tax deduction for certain personal casualty losses (e.g., resulting from crimes, scams, natural disasters) by eliminating the suspension period (2018–2025) on such deduction.
Extends the period for filing an amended return for claiming personal casualty losses.
Why Tax Relief for Scam Victims Matters
Addressing this issue brings hope to millions of Americans, especially older adults, who are left not only devastated by scams but then cruelly taxed on what was stolen from them.
Without a reinstatement of the deduction, Americans who are victims of theft will continue to face hefty federal tax bills that the IRS is obligated to enforce.
According to the FBI’s 2023 Elder Fraud Report, older adults lost more than $3.4 billion to scams in just one year, with the average loss exceeding $33,000. Operation Shamrock works directly with scam survivors, many of whom are blindsided by tax bills after being tricked into liquidating retirement accounts or other taxable assets under false pretenses.
The current lack of equitable tax relief compounds the trauma and undermines any sense of justice. While Ponzi scheme victims can deduct their losses, victims of romance scams, government impersonation, or tech support fraud have no such path. This disparity is indefensible and long overdue for correction.
The bill addresses this injustice by:
Reinstating the casualty and theft loss deduction for scam victims and disaster survivors
Providing retroactive relief back to 2018 for those impacted by prior tax law changes
Ensuring equal access to relief regardless of the type of scam or crime involved
This bipartisan, bicameral legislation is both fair and urgently needed. We urge all members of Congress to support its passage and help restore dignity to those who have already lost so much.
How You Can Help
Write to your representatives to share your support.
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