Survivor Justice Tax Prevention Act

The Survivor Justice Tax Prevention Act aims to change how the Internal Revenue Service (IRS) treats money received from legal settlements or judgments related to sexual abuse and unwanted sexual contact. Under current law, damages for physical injuries are generally tax-exempt, but the IRS often requires proof of visible physical harm, such as bruising or bleeding, to qualify. This bill would expand the tax code to explicitly include damages from sexual acts or contact as tax-exempt, regardless of whether a survivor can provide evidence of a visible physical injury.

Beyond changing the tax status of these awards, the bill proposes to simplify the process for survivors to claim this exemption. It would prohibit the IRS from requiring medical records to prove the abuse occurred, instead allowing the legal judgment or settlement agreement itself to serve as sufficient proof if it specifies the damages are for sexual acts or contact. Additionally, the bill would direct the Treasury Department to work with the Department of Justice to launch a public awareness campaign to ensure survivors and legal professionals are aware of these new tax protections.