Tr?id=566623520170033&ev=PageView&noscript=1

House Passes Bill to Restore Tax Deduction for Financial Fraud Victims

Posted on October 5th, 2026 at 1:10 PM
House Passes Bill to Restore Tax Deduction for Financial Fraud Victims

From the desk of Jim Eccleston at Eccleston Law

Victims of financial fraud may soon receive additional tax relief under legislation that overwhelmingly passed in the House of Representatives.

The bipartisan Tax Relief for Fraud Victims Act, H.R. 9500, passed the House by a 408-17 vote. The bill would restore the Section 165(a) tax deduction for personal casualty and theft losses and remove restrictions that currently limit when taxpayers may claim those losses. The legislation now awaits Senate consideration, as reported by InvestmentNews.

Congress restricted the Section 165(a) deduction beginning in 2018 as part of the 2017 tax law. The changes left most financial fraud victims unable to claim the deduction, apart from narrow exceptions that include certain investment fraud losses.

H.R. 9500 would restore the deduction for fraud losses and provide several additional forms of relief. The bill would waive the 10 percent penalty on certain early 401(k) distributions, extend the deadline for filing refund claims, reduce certain limitations on refund amounts and give taxpayers one year from discovering a theft loss to repay early distributions.

According to InvestmentNews, the CFP Board supports the legislation, which Reps. Max Miller, an Ohio Republican, and Thomas Suozzi, a New York Democrat, co-sponsored.

InvestmentNews reports that the CFP Board estimates that Americans lost $68 billion to financial scams in 2025. The organization said the actual figure may be higher because some victims do not report losses due to embarrassment.

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, financial fraud, tax relief, securities law, investor protection

Return to Archive

TESTIMONIALS

Previous
Next
Quotes Bigger

If you find yourself in trouble with the regulators, call Eccleston Law, you won't regret it.

Rick R.

LATEST NEWS AND ARTICLES

1794596228 Law
November 13, 2026
Snowden Lane Partners to Pay $364,590 Over Undisclosed Conflicts and Misleading Client Agreements

Snowden Lane Partners will pay $364,590 to settle Securities and Exchange Commission (SEC) charges that it failed to disclose compensation arrangements tied to client cash sweep investments and margin loans.

1794509056 Law
November 12, 2026
SEC Issues its 2026 Enforcement Report

The Securities and Exchange Commission (SEC) filed 348 enforcement actions in fiscal year 2026, including 235 standalone actions and 113 follow-on administrative proceedings.

1794418115 Law
November 11, 2026
Morgan Stanley Develops AI Super Agents to Build Portfolios and Manage Client Accounts

Morgan Stanley is developing AI-powered "super agents" that could eventually build investment portfolios, manage client accounts and handle many of the routine tasks that wealth management professionals perform today.