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Bill Would End Practice of Taxing Scam Victims
Residents urged to call legislators in support of bill
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Having money stolen from your retirement account is taxing enough. It shouldn’t have to happen twice.
Wisconsin State Senator Mary Felzkowski (R-Tomahawk) and Representative Rob Swearingen (R-Rhinelander) recently authored a bill to stop financial fraud victims from being taxed on their losses.
Under current law, if a criminal has stolen funds from a victim’s 401(k) or other taxable account, the victim will likely owe taxes on the funds withdrawn from the account or on assets that have been sold.
This is an overwhelming burden for many victims, many of whom no longer can pay this tax bill due to the fraud loss. Victims must work with the IRS to develop a payment plan, which often results in an inability to rebuild savings during that time and extreme financial strain.
Sen. Felzkowski and Rep. Swearingen introduced the bill after one Wisconsin man had over $1 million stolen from his retirement savings account by scammers and was then hit with a $20,000 tax bill on the stolen funds.
This bill gives victims of financial fraud some relief from the losses they have suffered.
We encourage everyone to contact their local state legislators and encourage them to support this bill. Anyone who is unsure which lawmakers represent them can visit maps.legis.wisconsin.gov.
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