U.S. Senators John Cornyn (R-TX), Ron Wyden (D-OR), James Lankford (R-OK), Raphael Warnock (D-GA), along with U.S. Representatives Jodey Arrington (TX-19) and Brad Schneider (IL-10), have introduced the Human Trafficking Survivor Tax Relief Act. The bill aims to exempt civil damages, restitution, and other monetary awards given to human trafficking survivors from federal income taxes. It would also formalize current Internal Revenue Service guidance that already exempts criminal case restitution payments from federal taxes.
Senator Cornyn stated, “Texans who have been exploited, coerced, or forced into involuntary sexual acts or labor should not have to pay taxes on the payments awarded to them after enduring such a horrific crime. Providing these survivors with tax-relief is one small step we can take to alleviate some of the burden on their journey to healing.”
Senator Wyden commented, “The survivors of human trafficking have been to hell and back, and the last thing they need as they rebuild their lives is a giant tax bill. Our legislation is about providing basic fairness for survivors of trafficking and ensuring that our tax code isn’t penalizing them for pursuing justice through what’s often the only means available.”
Senator Lankford added, “Human trafficking survivors often face a long path to getting the closure and justice they deserve. As they heal, they shouldn’t be punished by the US tax code. This bill will support survivors by making sure that damages awarded, whether through civil or criminal cases, are exempt from federal income tax. This lets those who suffered at the hands of traffickers focus on recovery instead of bureaucracy.”
Senator Warnock said, “Human trafficking is one of the most horrendous and inhumane things we continue to face in modern society. I am proud join this legislation to ease the lifelong financial burdens that so many of these victims face. Although money cannot return what has already been taken, it can usher in new opportunities for victims of these heinous crimes.”
Chairman Arrington stated, “There is no amount of compensation that can remedy the many horrors that victims of human trafficking have to endure. As we work to eradicate this heinous crime, we should ensure these victims aren’t burdened with tax penalties and reporting requirements when they receive civil damages or restitution. The bipartisan Human Trafficking Survivor Tax Relief Act will solve this injustice and help survivors of modern-day slavery rebuild their lives.”
Rep. Schneider noted, “We must do everything in our power to help survivors of human trafficking reclaim their lives. This is why I am proud to help lead the Human Trafficking Survivor Tax Relief Act, which would eliminate deferral income tax on restitution payments to human trafficking survivors and end the discrepancy that treats criminal and civil payments to trafficking survivors differently. No survivor should be burdened for seeking justice. Our compassion, and our action, must have no limits.”
Currently under federal law, civil damages awarded to human trafficking victims are considered taxable income while criminal restitution is not taxed due to IRS Notice 2012-12. The proposed legislation seeks parity between these forms of compensation by exempting civil damages from taxation as well.
The Human Trafficking Survivor Tax Relief Act has received endorsements from Freedom Network USA and Rights4Girls.
In previous elections dating back more than two decades, John Cornyn has won several general elections including victories over MJ Hegar in 2020 with 53.5% of votes; David Alameel in 2014 with 61.6%; Ron Kirk in 2002 with 55%; and Rick Noriega in 2008 with 54.8%.
