October 22, 2026
Mr. Morelle introduced the following bill; which was referred to the Committee on Ways and Means
To amend the Internal Revenue Code of 1986 to remove the limitation on deductions for theft losses involving fraud, deceit, or misrepresentation and to allow such deductions without regard to whether the taxpayer itemizes other deductions.
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 Scams Tax Relief Act
.
Sec. 2. Removal of limitation on deductions for certain theft losses; deductions for certain theft losses allowed without regard to whether taxpayer itemizes other deductions
(a) Removal of limitation on deductions for certain theft losses
Section 165(h)(5) of the Internal Revenue Code of 1986 is amended—
(1)
in subparagraph (A), by striking a Federally declared disaster
and all that follows, and inserting a Federally declared disaster (as defined in subsection (i)(5)), a State declared disaster, or theft involving fraud, deceit, or misrepresentation (as defined by the Secretary).
, and
(2)
in subparagraph (B)—
(A)
in clause (i), by striking a Federally declared disaster (as so defined) or a State declared disaster
and inserting a Federally declared disaster (as so defined), a State declared disaster, or theft involving fraud, deceit, or misrepresentation (as defined by the Secretary)
, and
(B)
in clause (ii), by inserting or theft
after disaster
.
(b) Deductions for certain theft losses allowed without regard to whether taxpayer itemizes other deductions
Subsection (a) of section 62 of such Code is amended by inserting after paragraph (21) the following new paragraph:
(22) Theft losses involving fraud, deceit, or misrepresentation
The deduction allowed by section 165 for losses arising from theft involving fraud, deceit, or misrepresentation (as defined by the Secretary).
(c) Effective date
The amendments made by this section shall apply to losses sustained after the date of the enactment of this Act.