The 2017 Tax Cuts and Jobs Act took away a tax deduction for those who were scammed, leaving many victims with a massive bill to pay.
A new report suggests that the tax change has left more than a million Americans in debt, with many facing thousands of dollars in tax bills on money they no longer have.
The report, commissioned by the U.S. Senate Special Committee on Aging, found that the repeal of the casualty and theft loss tax deduction has been a “devastating” blow for scam victims, many of whom are elderly.
The deduction allowed victims to offset their losses and move on with their lives. But the change has left older adults feeling devastated and financially strained. Some are having to borrow from family and friends and are in danger of going bankrupt.
The report details the devastating impact of the tax change on a number of scam victims, including Larry, who lost his entire retirement savings to scammers. Helen, who has lost most of her life’s savings to scammers, is now facing a $60,000 federal tax bill.
The report calls for the reinstatement of the casualty and theft loss deduction, arguing that it is essential to protect victims of fraud and scams. Congress must act to ensure that victims of fraud are not left to pay taxes on stolen money.