Tax Relief for Fraud Victims Act

This bill makes two changes to how personal losses are treated under the federal tax code. First, it repeals a limitation in Section 165(h) of the Internal Revenue Code on deductions for personal casualty losses, a broader change that is not limited to fraud: it restores the deduction for losses like fire, storm, or accident damage, not just theft. Second, for theft losses specifically involving fraud, deceit, or misrepresentation, meaning scams, the bill lets a taxpayer choose to treat the loss as occurring in the year the theft happened rather than the year it was discovered, extends the deadline to claim a tax refund for such losses to at least one year after the taxpayer discovers the loss, and exempts an early retirement-account withdrawal used to cover such a loss from the usual early-withdrawal penalty, with a one-year window to repay the withdrawal. These fraud-related changes and the retirement-account provision apply to losses and distributions after December 31, 2025. The bill also sets an earlier effective date, December 31, 2020, specifically for personal casualty losses caused by pyrrhotite, a mineral that has deteriorated concrete home foundations in parts of the Northeast, and gives those taxpayers a year after enactment to file refund claims. The House passed it on September 15, 2026, 408 to 17.

At least 3 organizations named this measure in a lobbying filing. A floor, not a total: they were counted by the client name on 4 quarterly reports filed by 1 lobbying firm and by 2 organizations lobbying for themselves in 2026 Q2 and 2026 Q3. An organization that lobbied this measure without naming it is not counted here.

The filings record that lobbying was reported on the measure. The form has no per-bill dollar figure and no field for a position, so nothing here says how much was spent or which side an organization took.

The organizations named: Small Business & Entrepreneurship Council (Sbe Council); Certified Financial Planner Board of Standards, Inc.; American Property Casualty Insurance Association. Listed as filed. They are every client name on the filings counted here.

From the LD-2 quarterly lobbying filings published at lda.gov by the Senate Office of Public Records. Read for 2025 Q1, 2025 Q2, 2025 Q3, 2025 Q4, 2026 Q1, 2026 Q2 and 2026 Q3. Our copy holds 24 fewer filings for 2025 Q1, 39 fewer filings for 2025 Q2, 42 fewer filings for 2025 Q3, 33 fewer filings for 2025 Q4, 28 fewer filings for 2026 Q1, 48 fewer filings for 2026 Q2 and 218 fewer filings for 2026 Q3 than the Senate's register counts, so those quarters are the filings we could read rather than every one filed. 2026 Q4 is still inside its filing window, so that quarter is only the filings posted so far.