Press Releases

Moore, Smucker Introduce Bipartisan Survivor Justice Tax Prevention Act

WASHINGTON - Reps. Gwen Moore (WI-04) and Lloyd Smucker (PA-11), members of the Ways and Means Committee, announced the reintroduction of the Survivor Justice Tax Prevention Act. This legislation will amend the nation’s tax code to ensure survivors of sexual abuse and unwanted and illegal sexual contact do not have to pay taxes on settlement income when they prevail legally against their abuser.

Under current law, damages awarded for personal physical injuries or physical sickness are excluded from gross income for federal tax purposes. However, to qualify for this exemption, the IRS requires evidence of a “physical injury,” often interpreted as visible harm –such as bruising, cuts, or bleeding. This “observable harm” standard can be especially difficult and unjust in cases of sexual assault or sexual contact, where such physical injuries may not be visible or may have already healed. 

Representatives Moore and Smucker’s legislation makes a targeted change to fix the disparity in current law by aligning the IRS tax exemption with the federal criminal code’s definitions of sexual act and sexual contact. This would extend tax-free treatment to survivors of sexual assault and unwanted sexual contact without requiring them to demonstrate visible physical injuries.

“I am determined to support survivors of abuse using all available tools. As a member of the Ways and Means Committee, I will continue working to advance this bipartisan legislation, which will change the tax code to better serve all survivors who receive settlements after prevailing against their abusers by not saddling them with a tax bill,” said Rep. Gwen Moore (WI-04).  

“This legislation brings much-needed clarity and fairness to the tax code by ensuring that all survivors of sexual assault are not taxed on the monetary settlements they receive. These individuals have already endured unimaginable trauma. They should not be further burdened by a tax code that treats survivors of the same crime differently, simply based on whether their injuries are outwardly observable. I urge my colleagues to stand with survivors by supporting this narrowly crafted, bipartisan legislation. I grateful to Rep. Gwen Moore partnering with me to champion this important effort,” said Rep. Lloyd Smucker (PA-11).

The legislation is supported by a number of organizations who are calling for the legislation to be passed swiftly.

“On behalf of the thousands of courageous survivors of gender-based violence that the YWCA network supports each year, I applaud Representatives Lloyd Smucker and Gwen Moore for championing this legislation to provide certainty to all victims of sexual violence that monetary settlements are exempt from federal income tax,” said YWCA USA CEO Margaret Mitchell. “We stand with survivors in all their steps of healing and this thoughtful and bipartisan bill is a helpful step.”

“At YWCA Lancaster we support this common sense proposed tax code change. Representative Smucker has met with our team and this concrete step is a solution that means the world to survivors,” said Stacie Blake, Chief Executive Officer, YWCA Lancaster.

“On behalf of the members of the American Association of Settlement Consultants (AASC), whose professional efforts protect injured parties' long term financial interests, we are grateful for the leadership of Reps. Smucker and Moore in advancing the commonsense and bipartisan Survivor Justice Tax Prevention Act. Their efforts to support survivors are deserving of praise. We call on their colleagues to support this legislation which should be advanced without delay,” said AASC President Louis Masry.

“As a survivor and advocate, I’ve seen firsthand how civil judgments provide a rare form of justice that can help survivors reclaim some control over their lives and begin to heal,” said Grace French, founder and president of the Army of Survivors. “But taxing these settlements forces survivors to give back part of what they sacrificed so much to attain. This legislation will allow us to receive full settlements, unencumbered by tax burdens that devalue the painful journey to justice. It’s a crucial step in helping survivors move forward.”

Endorsed by Victim Rights Law Center, the National Alliance to End Sexual Violence, YWCA USA, the Army of Survivors, MomsRising, American Association of Settlement Consultants.