H.R. 6999

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6999 Introduced in House (IH)]

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119th CONGRESS
2d Session
H. R. 6999

To amend the Internal Revenue Code of 1986 to repeal the limitation on 
deductions for personal casualty losses and to provide for increased 
taxpayer relief with respect to theft losses involving fraud, deceit, 
or misrepresentation.

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IN THE HOUSE OF REPRESENTATIVES

January 9, 2026

Mr. Miller of Ohio (for himself and Mr. Suozzi) introduced the 
following bill; which was referred to the Committee on Ways and Means

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A BILL

To amend the Internal Revenue Code of 1986 to repeal the limitation on 
deductions for personal casualty losses and to provide for increased 
taxpayer relief with respect to theft losses involving fraud, deceit, 
or misrepresentation.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Tax Relief for Fraud Victims Act''.

SEC. 2. REPEAL OF LIMITATION ON DEDUCTIONS FOR PERSONAL CASUALTY 
LOSSES; INCREASED TAXPAYER RELIEF WITH RESPECT TO CERTAIN 
THEFT LOSSES.

(a) Repeal of Limitation on Deductions for Personal Casualty 
Losses.--Section 165(h) of the Internal Revenue Code of 1986 is amended 
by striking paragraph (5).
(b) Certain Theft Losses Sustained During Taxable Year of Choice; 
Extension of Period of Limitation for Credit or Refund Claims for 
Certain Theft Losses.--
(1) Certain theft losses sustained during taxable year of 
choice.--Section 165(e) of such Code is amended to read as 
follows:
``(e) Theft Losses.--For purposes of subsection (a)--
``(1) In general.--Except as provided in paragraph (2), any 
loss arising from theft shall be treated as sustained during 
the taxable year in which the taxpayer discovers such loss.
``(2) Theft losses involving fraud, deceit, or 
misrepresentation.--In the case of any loss arising from theft 
involving fraud, deceit, or misrepresentation (as defined by 
the Secretary), the taxpayer may elect to treat such loss as 
sustained during the taxable year in which such loss occurs.''.
(2) Extension of period of limitation for credit or refund 
claims for certain theft losses.--Section 165(h)(4) of such 
Code is amended by adding at the end the following new 
subparagraph:
``(F) Period of limitation for credit or refund 
claims for theft losses involving fraud, deceit, or 
misrepresentation.--In the case of a claim for credit 
or refund with respect to a deduction allowed under 
subsection (a) for any loss arising from theft 
involving fraud, deceit, or misrepresentation--
``(i) the period of limitation prescribed 
by section 6511(a) for the filing of such claim 
shall be treated as not expiring earlier than 
the date that is 1 year after the date on which 
the taxpayer discovers such loss, and
``(ii) section 6511(b)(2) shall not apply 
with respect to the filing of such claim.''.
(c) Distributions Relating to Theft Losses Involving Fraud, Deceit, 
or Misrepresentation.--Section 72(t)(2) of such Code is amended by 
adding at the end the following new subparagraph:
``(O) Distributions relating to theft losses 
involving fraud, deceit, or misrepresentation.--
``(i) In general.--Any distribution to the 
extent it relates to any loss arising from 
theft involving fraud, deceit, or 
misrepresentation for which a deduction is 
allowed under section 165(a).
``(ii) Amount distributed may be repaid.--
Rules similar to the rules of subparagraph 
(H)(v) shall apply with respect to an 
individual who receives a distribution to which 
clause (i) applies, except that subparagraph 
(H)(v)(I) shall be applied by substituting `1-
year period beginning on the day after the date 
on which the taxpayer discovers the loss 
described in subparagraph (O)(i)' for `3-year 
period beginning on the day after the date on 
which such distribution was received'.
``(iii) Period of limitation for credit or 
refund claims.--In the case of a claim for 
credit or refund of the tax imposed by 
paragraph (1) with respect to a distribution 
described in clause (i)--
``(I) the period of limitation 
prescribed by section 6511(a) for the 
filing of such claim shall be treated 
as not expiring earlier than the date 
that is 1 year after the date on which 
the taxpayer discovers the loss 
described in clause (i), and
``(II) section 6511(b)(2) shall not 
apply with respect to the filing of 
such claim.''.
(d) Cross Reference.--Section 6511(i) of such Code is amended by 
adding at the end the following new paragraph:
``(8) For a period of limitations for credit or refund in 
the case of theft losses involving fraud, deceit, or 
misrepresentation, see sections 72(t)(2)(O)(iii) and 
165(h)(4)(F).''.
(e) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the 
amendments made by this section shall apply to losses sustained 
in taxable years beginning after December 31, 2025.
(2) Distributions relating to theft losses involving fraud, 
deceit, or misrepresentation.--The amendment made by subsection 
(c) shall apply to distributions made after December 31, 2025.
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