[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9500 Engrossed in House (EH)]
<DOC>
119th CONGRESS
2d Session
H. R. 9500
_______________________________________________________________________
AN ACT
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) Claim Processing Deadline.--In the case of a claim for credit
or refund with respect to a deduction allowed under section 165(a) of
such Code for any specified personal casualty loss (as defined in
subsection (f)(5)) or with respect to any distribution described in
section 72(t)(2)(O)(i) of such Code (as added by this section), the
Secretary of the Treasury (or the Secretary's delegate) shall process
such claim not later than 2 years after the date on which such claim is
filed.
(f) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
losses sustained in taxable years beginning after December 31,
2025.
(2) Specified personal casualty losses.--In the case of any
specified personal casualty loss, paragraph (1) shall be
applied by substituting ``December 31, 2020'' for ``December
31, 2025''.
(3) Distributions relating to theft losses involving fraud,
deceit, or misrepresentation.--The amendment made by subsection
(c) shall apply to distributions made after December 31, 2020.
(4) Extension of period of limitation for credit or refund
claims for specified personal casualty losses.--
(A) Fraud-related personal casualty losses.--In the
case of any fraud-related personal casualty loss, if
the taxpayer discovers such loss before the date of the
enactment of this section--
(i) section 165(h)(4)(F)(i) of the Internal
Revenue Code of 1986 (as added by this section)
shall be applied by substituting ``the date of
the enactment of this subparagraph'' for ``the
date on which the taxpayer discovers such
loss'', and
(ii) section 72(t)(2)(O)(iii)(I) of such
Code (as added by this section) shall be
applied by substituting ``the date of the
enactment of this subparagraph'' for ``the date
on which the taxpayer discovers the loss
described in clause (i)''.
(B) 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 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.
(5) Specified personal casualty loss.--For purposes of this
subsection--
(A) Specified personal casualty loss.--The term
``specified personal casualty loss'' means--
(i) any fraud-related personal casualty
loss, and
(ii) any pyrrhotite-related personal
casualty loss.
(B) Fraud-related personal casualty loss.--The term
``fraud-related personal casualty loss'' means any
personal casualty loss (as defined in section
165(h)(3)(B) of the Internal Revenue Code of 1986)
sustained after December 31, 2020, and before January
1, 2026, arising from theft involving fraud, deceit, or
misrepresentation (as defined by the Secretary).
(C) Pyrrhotite-related personal casualty loss.--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)
sustained after December 31, 2020, and before January
1, 2026, 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.
Passed the House of Representatives September 15, 2026.
Attest:
Clerk.
119th CONGRESS
2d Session
H. R. 9500
_______________________________________________________________________
AN ACT
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.