HouseH.R. 9500119th Congress
Tax Relief for Fraud Victims Act
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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9500 Introduced in House (IH)]
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119th CONGRESS
2d Session
H. R. 9500
To amend the Internal Revenue Code of 1986 to repeal the limitation on
deductions for personal casualty losses and to provide for increased
taxpayer relief with respect to theft losses involving fraud, deceit,
or misrepresentation.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 29, 2026
Mr. Miller of Ohio (for himself and Mr. Suozzi) introduced the
following bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to repeal the limitation on
deductions for personal casualty losses and to provide for increased
taxpayer relief with respect to theft losses involving fraud, deceit,
or misrepresentation.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Tax Relief for Fraud Victims Act''.
SEC. 2. REPEAL OF LIMITATION ON DEDUCTIONS FOR PERSONAL CASUALTY
LOSSES; INCREASED TAXPAYER RELIEF WITH RESPECT TO CERTAIN
THEFT LOSSES.
(a) Repeal of Limitation on Deductions for Personal Casualty
Losses.--Section 165(h) of the Internal Revenue Code of 1986 is amended
by striking paragraph (5).
(b) Certain Theft Losses Sustained During Taxable Year of Choice;
Extension of Period of Limitation for Credit or Refund Claims for
Certain Theft Losses.--
(1) Certain theft losses sustained during taxable year of
choice.--Section 165(e) of such Code is amended to read as
follows:
``(e) Theft Losses.--For purposes of subsection (a)--
``(1) In general.--Except as provided in paragraph (2), any
loss arising from theft shall be treated as sustained during
the taxable year in which the taxpayer discovers such loss.
``(2) Theft losses involving fraud, deceit, or
misrepresentation.--In the case of any loss arising from theft
involving fraud, deceit, or misrepresentation (as defined by
the Secretary), the taxpayer may elect to treat such loss as
sustained during the taxable year in which such loss occurs.''.
(2) Extension of period of limitation for credit or refund
claims for certain theft losses.--Section 165(h)(4) of such
Code is amended by adding at the end the following new
subparagraph:
``(F) Period of limitation for credit or refund
claims for theft losses involving fraud, deceit, or
misrepresentation.--In the case of a claim for credit
or refund with respect to a deduction allowed under
subsection (a) for any loss arising from theft
involving fraud, deceit, or misrepresentation--
``(i) the period of limitation prescribed
by section 6511(a) for the filing of such claim
shall be treated as not expiring earlier than
the date that is 1 year after the date on which
the taxpayer discovers such loss, and
``(ii) section 6511(b)(2) shall not apply
with respect to the filing of such claim.''.
(c) Distributions Relating to Theft Losses Involving Fraud, Deceit,
or Misrepresentation.--Section 72(t)(2) of such Code is amended by
adding at the end the following new subparagraph:
``(O) Distributions relating to theft losses
involving fraud, deceit, or misrepresentation.--
``(i) In general.--Any distribution to the
extent it relates to any loss arising from
theft involving fraud, deceit, or
misrepresentation for which a deduction is
allowed under section 165(a).
``(ii) Amount distributed may be repaid.--
Rules similar to the rules of subparagraph
(H)(v) shall apply with respect to an
individual who receives a distribution to which
clause (i) applies, except that subparagraph
(H)(v)(I) shall be applied by substituting `1-
year period beginning on the day after the date
on which the taxpayer discovers the loss
described in subparagraph (O)(i)' for `3-year
period beginning on the day after the date on
which such distribution was received'.
``(iii) Period of limitation for credit or
refund claims.--In the case of a claim for
credit or refund of the tax imposed by
paragraph (1) with respect to a distribution
described in clause (i)--
``(I) the period of limitation
prescribed by section 6511(a) for the
filing of such claim shall be treated
as not expiring earlier than the date
that is 1 year after the date on which
the taxpayer discovers the loss
described in clause (i), and
``(II) section 6511(b)(2) shall not
apply with respect to the filing of
such claim.''.
(d) Cross Reference.--Section 6511(i) of such Code is amended by
adding at the end the following new paragraph:
``(8) For a period of limitations for credit or refund in
the case of theft losses involving fraud, deceit, or
misrepresentation, see sections 72(t)(2)(O)(iii) and
165(h)(4)(F).''.
(e) Effective Dates.--
(1) In general.--Except as provided in this subsection, the
amendments made by this subsection shall apply to losses
sustained in taxable years beginning after December 31, 2025.
(2) Distributions relating to theft losses involving fraud,
deceit, or misrepresentation.--The amendment made by subsection
(c) shall apply to distributions made after December 31, 2025.
(3) Pyrrhotite-related personal casualty losses.--
(A) In general.--In the case of any pyrrhotite-
related personal casualty loss, paragraph (1) shall be
applied by substituting ``December 31, 2020'' for
``December 31, 2025''.
(B) Pyrrhotite-related personal casualty loss.--For
purposes of this paragraph, the term ``pyrrhotite-
related personal casualty loss'' means any personal
casualty loss (as defined in section 165(h)(3)(B) of
the Internal Revenue Code of 1986) arising in
connection with damage to a principal residence (within
the meaning of section 121 of such Code) by reason of
deterioration of a concrete foundation adversely
impacted by pyrrhotite.
(C) Extension of period of limitation for credit or
refund claims for pyrrhotite-related personal casualty
losses.--In the case of a claim for credit or refund
with respect to a deduction allowed under section
165(a) of the Internal Revenue Code of 1986 by reason
of subparagraph (A) for any pyrrhotite-related personal
casualty loss--
(i) the period of limitation prescribed by
section 6511(a) of such Code for the filing of
such claim shall be treated as not expiring
earlier than the date that is 1 year after the
date of the enactment of this section, and
(ii) section 6511(b)(2) of such Code shall
not apply with respect to the filing of such
claim.
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