S.1773 - Tax Relief for Victims of Crimes, Scams, and Disasters Act (119th Congress)
Summary
S.1773, the Tax Relief for Victims of Crimes, Scams, and Disasters Act, aims to reinstate the deduction for personal casualty losses as it existed before the enactment of Public Law 115-97. This bill amends Section 165(h) of the Internal Revenue Code of 1986 by striking paragraph (5), effectively allowing taxpayers to deduct personal casualty losses again. The changes would apply to taxable years beginning after December 31, 2017, and provides an extension for filing claims for credit or refund related to these losses for returns filed before January 1, 2025.
Expected Effects
The primary effect of this bill would be to allow taxpayers to deduct personal casualty losses on their federal income taxes, providing financial relief after suffering losses from crimes, scams, or disasters. It also extends the time frame for taxpayers to claim refunds for casualty losses incurred in previous years where the deduction was suspended. This could result in increased tax refunds for eligible individuals and families.
Potential Benefits
- Provides financial relief to victims of crimes, scams, and disasters by allowing them to deduct personal casualty losses.
- Retroactively applies to taxable years beginning after December 31, 2017, offering benefits to those affected in prior years.
- Extends the period for filing claims for credit or refund, giving taxpayers more time to amend their returns.
- Could stimulate local economies in disaster-stricken areas as individuals have more disposable income due to tax relief.
- Simplifies the tax code for some individuals by reinstating a previously available deduction.
Potential Disadvantages
- May increase the complexity of tax preparation for some individuals, as they need to document and calculate casualty losses.
- Could potentially lead to increased tax fraud if not properly monitored and enforced.
- May disproportionately benefit higher-income individuals who are more likely to itemize deductions.
- The extension of time to file claims could create additional administrative burden for the IRS.
- The overall impact on the federal budget is not specified, potentially leading to increased deficits.
Most Disadvantaged Areas:
Constitutional Alignment
The bill aligns with the general welfare clause of the Constitution, as it aims to provide relief to citizens who have suffered losses due to unforeseen circumstances. Specifically, the Preamble states the intention to "promote the general Welfare". While the Constitution does not explicitly address tax deductions for casualty losses, Congress has broad authority to levy taxes and allocate funds for the general welfare of the United States, as outlined in Article I, Section 8.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).