Human Trafficking Survivor Tax Relief Act
Summary
The Human Trafficking Survivor Tax Relief Act aims to amend the Internal Revenue Code of 1986 by excluding from gross income any mandatory restitution or civil damages received as compensation for human trafficking. This exclusion applies to awards received under sections 1593 and 1595 of Title 18, United States Code. The bill seeks to provide financial relief to survivors of human trafficking by ensuring that restitution and damages awarded to them are not subject to taxation.
Expected Effects
If enacted, this bill would change how the IRS treats financial compensation awarded to human trafficking survivors. It would prevent the government from taxing restitution and civil damages meant to help survivors rebuild their lives. This could alleviate financial burdens and provide more direct support to victims.
Potential Benefits
- Provides financial relief to human trafficking survivors by exempting restitution and civil damages from taxation.
- Ensures that survivors receive the full amount of compensation awarded to them, without tax deductions.
- Simplifies the tax filing process for survivors by excluding these amounts from gross income.
- Offers additional support to survivors as they recover from the trauma of trafficking.
- Incentivizes reporting and prosecution of human trafficking by ensuring survivors are not penalized with taxes on awarded compensation.
Potential Disadvantages
- Potential for minor reduction in government tax revenue, although likely negligible.
- Possible complexities in defining and verifying which payments qualify for the exclusion.
- May require additional IRS guidance to ensure consistent application of the tax exemption.
- Could create a perception of unequal tax treatment compared to other forms of income, although justified by the unique circumstances of trafficking survivors.
- Risk of fraudulent claims, although existing legal frameworks for prosecuting fraud would apply.
Constitutional Alignment
This bill aligns with the Constitution's broad goals of establishing justice and promoting the general welfare, as stated in the Preamble. While the Constitution does not explicitly address taxation of restitution, Congress has broad authority to legislate on tax matters under Article I, Section 8, which grants the power to lay and collect taxes, duties, imposts, and excises. The bill does not appear to infringe on any specific constitutional right or limitation.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).