Survivor Justice Tax Prevention Act

Floor Speech

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Mr. SMUCKER. Mr. Speaker, I thank Chairman Smith for the time and also for bringing this bill up to the Ways and Means Committee.

I thank Ms. Moore for working with me cosponsoring and introducing this bill, and I thank the members of the Ways and Means Committee who supported this on a unanimous basis because they realize the injustice that is occurring today in the way the IRS is applying the current tax code.

I think the chairman and Ms. Moore both have described it really well. The core problem here, first of all, we believe our current law already says that any victim of physical abuse and any victim of sexual abuse who receives a settlement does not owe tax on that settlement, which makes complete sense. If you think of the trauma that these individuals have gone through, Mr. Speaker, if you think of the work they are doing to rebuild their lives, the last thing we should be doing is taking a portion of that settlement that they so desperately need to rebuild their lives for tax purposes. The law already says that settlement is not taxed.

However, the way the IRS has applied this, they require a proof of observable physical harm like bruises, cuts, or some other apparent evidence of damages to qualify that settlement as tax-free.

As you can imagine, Mr. Speaker, sexual violence doesn't always leave visible scars.

As a result, survivors who have already endured unimaginable trauma can face a second injustice under the current law or the way that the IRS is applying the law, and that is by being taxed on their compensation simply because their suffering doesn't meet some arbitrary standard.

Our bill fixes that problem. It fixes that injustice, and it helps these victims. It does it in a targeted way. It clarifies that payments related to sexual assault automatically are treated as tax exempt. This ensures that survivors are treated fairly and they are treated consistently under the law.

H.R. 2347 is about dignity. It is about clarity, and it is about making sure that survivors receive justice, not a tax bill, from the IRS.

I thank, again, the chairman, the leader, for bringing this bill up for a vote on the floor.

Mr. Speaker, I urge my colleagues to support this bill. Once again, I thank Representative Gwen Moore for her partnership on this important issue.

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