S 1773119th CongressIn Committee

Tax Relief for Victims of Crimes, Scams, and Disasters Act

Introduced: May 15, 2025

Economy & Taxes

Standard Summary

Comprehensive overview in 1-2 paragraphs

This bill, the Tax Relief for Victims of Crimes, Scams, and Disasters Act, would restore the personal casualty loss deduction to its pre-2018 form by repealing the suspension that was put in place under the 2017 tax law. In practical terms, individuals could again deduct unreimbursed losses to their property from certain casualties (such as disasters, theft, scams, or crimes) on their federal income tax returns, subject to the traditional limits that existed before Public Law 115-97. The bill also extends the deadline for certain taxpayers to file a claim for credit or refund related to those casualty loss deductions, if their return was filed before January 1, 2025 and the deduction was suspended at the time of filing. The overall aim is to provide relief to victims who suffered unreimbursed personal property losses and to offer a path to retroactive refunds for some taxpayers who were improperly limited by the prior suspension.

Key Points

1Reinstatement of the personal casualty loss deduction: The bill strikes the suspension of the deduction in section 165(h)(5), restoring the deduction for personal casualty losses to the rules that existed before the 2017 tax law change (i.e., prior to Public Law 115-97).
2Effective date: The amendment applies to taxable years beginning after December 31, 2017 (so it covers 2018 onward, returning to the pre-TCJA framework for personal casualty losses).
3Extended time to file claims for refunds/credits: For taxpayers who filed a return for a year ending before January 1, 2025 and who had a casualty loss deduction that was suspended when they filed, the period to file a claim for credit or refund is extended to the date prescribed for filing the return for the year that includes the enactment date. It also removes the standard 6511(b)(2) restriction for these claims.
4Limited scope of the extension: The extension applies only to claims related to the overpayment attributable to the deduction under section 165(a) for personal casualty losses described in section 165(c)(3).
5Title basis vs. enacted text: The bill’s title emphasizes relief for victims of crimes, scams, and disasters, but the text focuses on reinstating the casualty loss deduction and extending claim deadlines. The practical effect is targeted tax relief for individuals with qualifying unreimbursed losses.

Impact Areas

Primary group/area affected: Individual taxpayers who experienced personal casualty losses (such as damages from disasters, theft, crimes, scams, or other qualifying events) and could have claimed a casualty loss deduction under pre-TCJA rules.Secondary group/area affected: Taxpayers who filed returns in years ending before 2025 with casualty loss deductions suspended at filing time; taxpayers seeking refunds or credits related to those deductions; tax professionals assisting these taxpayers.Additional impacts: Potential impact on federal revenue (through allowing more casualty loss deductions and accidental refunds); administrative considerations for the IRS in processing amended returns or extended claims; potential infringement or interplay with state disaster relief programs and insurance reimbursements.Personal casualty loss deduction: A deduction for unreimbursed losses to property resulting from a sudden, unusual, or unexpected event (e.g., disasters, theft, or other casualty events), subject to limitations that existed before the 2017 tax law changes.165(h) and 165(a): Sections of the Internal Revenue Code dealing with deductions for losses, including personal casualty losses.6511 and 6511(b)(2): Provisions governing the statute of limitations for filing refund or credit claims. The bill proposes extending these time limits for certain casualty loss claims.

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