Imagine thieves scamming you and losing about $655,000. Now, also imagine paying an extra $100,000 in tax charges on top of the $655,000 you just lost. This is the sad reality of Frances Sharples, a former White House science adviser, and many others.
Since Donald Trump’s administration, fraud victims have been facing large tax bills which the majority have been unable to pay. Therefore, Sen. Robert P. Casey Jr. (D-Pa.), chairman of the Senate’s Special Committee on Aging, calls for the IRS to do something about this. He is also asking them what policies they intend to enforce to help victims before they wallow in debt forever.
In a letter to IRS Commissioner Daniel Werfel, he asked the agency to conduct an investigation and show how Trump’s bill is affecting these victims. Congressional Republicans decided in 2017 to suspend the tax deduction that aided fraud victims.
Therefore, he also asked the IRS to provide documents by January 18, 2024, showing the bill’s effects since they implemented it. In a recent publication of The Washington Post, Casey wrote, “highlighting the experiences of older adults who have found themselves on the hook for large federal tax bills after having money stolen by fraudsters.”
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Many fraud victims suffer from this policy, and the post highlighted a couple of them, including Sharples. In 2017, the deduction caused a lot of uproar, which died down quickly. Republicans said that a budget of $1.5 million was the maximum amount they could reduce revenue to the federal government over a decade.
So, they had to do a lot of tax and budget cuts. One of the many deductions they made targeted specific groups of taxpayers, including crime victims. This has backfired and is doing more harm than good to the citizens. Therefore, Casey and several other media outlets decided to conduct investigations to determine the extent of the damages.
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He wrote, “Following the removal of this provision, older adults and their families from across the Nation have faced the shock and financial burden of enormous federal tax bills after having their life savings drained by thieves and fraudsters.”
Furthermore, “This issue is particularly concerning as older adults appear to have disproportionately used the theft deduction before its elimination.” So, what does the IRS think of this matter?
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Surprisingly, the tax body hasn’t said a lot about this yet. They previously declined to comment on specific cases like this. However, they did release a vague statement to the press.
They said people should direct questions to legislators touching on appropriate tax policy. “If there are unintended consequences from legislation passed into law, outside of flexibilities granted to the [Treasury] Secretary, the IRS does not have the authority to resolve them.”
Similarly, the Republicans still believe they are on the right track and want to make it a permanent law. To them, these deductions are essential to reduce the tax cost for everybody. However, Casey still supports his view, stating, “Victims of fraud deserve more avenues to recover their losses.”
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