Wyden Reintroduces Bipartisan Bill to Exempt Trafficking Survivors’ Restitution from Federal Taxes
Wyden: This legislation ensures survivors have resources to rebuild their lives
Washington, DC — U.S. Sen. Ron Wyden said he is reintroducing bipartisan legislation that would exempt civil and criminal damages, restitution, and other monetary awards given to human trafficking survivors from federal income taxes.
“Human trafficking survivors face many hurdles in securing justice against their abusers,” Wyden said. “This legislation exempts critical financial relief from federal taxes, ensuring survivors have resources to rebuild their lives.”
Under current Internal Revenue Code, civil damages awarded to human trafficking victims are considered taxable income. This legislation would exempt civil damages from federal income taxes, allowing survivors to file their taxes without worry of penalties or fees for not reporting awarded damages as income. Because often civil litigation is survivors’ only avenue for recourse to pursue justice against traffickers, the bill provides parity between criminal restitution, which is tax-exempt, and civil damages, which are not. Finally, the bill codifies IRS Notice 2012-12, ensuring that restitution payments made in criminal cases remain tax-free.
The Human Trafficking Survivor Tax Relief Act is supported by the Freedom Network USA, the Polaris Project, & Rights4Girls. Other organizations who have supported past-efforts include the End Child Pornography and Trafficking (ECPAT), the National Association to Protect Children, the Coalition Against Trafficking in Women (CATW), Shared Hope International, the National Children’s Alliance, Freedom Network USA, the Alliance to End Slavery and Trafficking (ATEST), and the Coalition to Abolish Slavery & Trafficking (CAST).
Wyden is joined in reintroducing the bill by Senators John Cornyn, R-Texas, Tom Carper, D-Del., Rob Portman, R-Ohio, Tim Scott, R-S.C., James Lankford, R-Okla., Kyrsten Sinema, D-Ariz., and Roger Wicker, R-Miss.