House panel approves bill to restore tax deductions for fraud victims

According to CNBC, the House Ways and Means Committee approved a bipartisan bill on July 1 by a vote of 39-0 that would change the tax treatment of fraud losses and waive a 10% early withdrawal penalty in some cases. The Tax Relief for Fraud Victims Act, H.R. 9500, would eliminate current limits on deducting personal casualty and theft losses, let victims claim deductions in the tax year the loss occurred, and make it easier to replace money withdrawn from retirement accounts. Under current rules, losses from investment fraud may be deductible, but money lost to impersonator or romance scams is not, and taxes can also be due if victims tap tax-deferred retirement accounts such as a traditional 401(k) or individual retirement account. The article said it is uncertain when or whether the full House will consider the measure.