Recently, the U.S. House Ways and Means Committee unanimously passed the Tax Relief for Fraud Victims Act. Currently, federal tax deductions for personal casualty and theft losses are limited to federally declared disaster losses. Under the bill, victims of Ponzi schemes, cryptocurrency scams, identity theft and other fraud would be able to deduct their financial losses. The bill would also extend the filing deadline for fraud victims seeking refunds and waive any early-withdrawal penalties resulting from retirement plan theft. The bill still needs to pass the House and Senate before it can be signed into law.
