Survivor Justice Tax Prevention Act
- Sponsor
- Rep. Smucker, Lloyd [R-PA-11]
- Committees
- Ways and Means Committee (primary)
- Last action
- Jul 14, 2026
Bottom line
This bill provides tax relief to survivors of sexual assault or contact by making compensatory damages tax-exempt, clarifies the burden of proof for such claims, and ensures public awareness of this change.
What it actually does
This bill amends Section 104(a)(2) of the Internal Revenue Code of 1986 to exclude from gross income any damages, other than punitive damages, received on account of sexual acts or sexual contact, regardless of whether there are medical records or observable injuries. It also establishes that a statement in a decision or agreement indicating damages are for such acts or contact serves as credible evidence for tax purposes and mandates a public awareness program by the Treasury Department.
Proponents argue
Proponents argue this bill provides essential financial relief and justice for survivors of sexual assault, ensuring they are not further victimized by taxation on damages intended to compensate for profound harm. It recognizes that the harm from sexual violence extends beyond physical injury and that current tax law can re-victimize survivors by taxing their compensation.
Opponents contend
Opponents might argue that expanding tax exclusions could erode the tax base, potentially leading to increased burdens elsewhere or reduced government revenue. Some might also raise concerns about the potential for abuse or difficulty in verifying claims without observable physical injuries, though the bill attempts to address the burden of proof.
The bill is very short and clearly written, making it highly accessible for a quick review and understanding of its core provisions.
Section 2(a)
Exclusion of Damages for Sexual Acts or Contact from Gross Income
This provision amends the Internal Revenue Code to state that damages received on account of any sexual act or sexual contact are excluded from gross income, similar to how damages for personal physical injuries or physical sickness are treated. Crucially, it clarifies that this exclusion applies 'whether or not there are medical records or observable injuries of such act or contact,' recognizing the often non-physical nature of these harms.
Supporters argue
Supporters contend that this change is a matter of justice, preventing survivors from being taxed on compensation for profound trauma and harm. It acknowledges that the harm from sexual violence extends beyond physical injury and that current tax law can re-victimize survivors.
Critics contend
Critics might express concern about the precedent of expanding tax exclusions beyond physical injuries, potentially leading to a broader erosion of the tax base. They might also argue for clearer definitions or stricter verification processes, though the bill attempts to address this.
Tradeoffs
The bill balances the desire to provide justice and financial relief to survivors against potential concerns about the scope of tax exclusions and the administrative implications for the IRS.
Section 2(b)
Clarification of Burden of Proof for Sexual Act/Contact Damages
This section adds a new subsection (d) to Section 104 of the Internal Revenue Code. It specifies that if a decision or agreement explicitly states that damages are received on account of a sexual act or sexual contact, this statement will be treated as credible evidence for tax purposes. Furthermore, the taxpayer will be considered to have met the requirements of Section 7491(a)(2) regarding the burden of proof on this issue.
Section 2(e)
Public Awareness Program for the Exclusion
This section directs the Secretary of the Treasury, in consultation with the Department of Justice Office on Violence Against Women and other relevant Federal agencies, to conduct a program aimed at promoting public awareness of the new tax exclusion for damages related to sexual acts or sexual contact.
The bill incorporates definitions of "sexual act" and "sexual contact" by referencing paragraphs (2) and (3) of section 2246 of title 18, United States Code, as in effect on the date of enactment.
Section 2(a)(B)
Why it matters:This is standard legislative practice for brevity and consistency, avoiding reprinting lengthy definitions already established in law. It ensures that the tax code's application aligns with existing criminal definitions of these terms.
Case for: Referencing existing definitions ensures consistency across federal law and avoids creating conflicting interpretations of sensitive terms. It streamlines the legislative process.
Case against: A reader unfamiliar with Title 18 would need to consult external legal texts, making the bill less self-contained and immediately understandable.
Estimated impact: Ensures legal clarity and consistency in the application of the tax exclusion, directly impacting which types of damages qualify.
This subsection explicitly states that no inference should be drawn from the amendment regarding whether the term "personal physical injuries or physical sickness" (in the original Section 104(a)(2)) includes injuries or sickness without medical records or observable injuries.
Section 2(d)
Why it matters:It's a technical clarification to prevent unintended legal consequences or interpretations of existing law, rather than a direct operative provision. It ensures the new language doesn't inadvertently change the interpretation of the *original* exclusion.
Case for: Prevents unintended narrowing of the existing "physical injury" exclusion by clarifying that the new language for sexual acts/contact doesn't imply that physical injuries *must* have observable records.
Case against: No strong case against; it's a standard legal safeguard.
Estimated impact: Maintains the status quo interpretation of existing tax law regarding physical injuries, avoiding potential new litigation or confusion.