Right now, if a survivor of sexual assault wins a civil settlement or court judgment, the IRS can tax those damages as income unless the survivor can document physical injuries — a hurdle that often forces people to relive trauma in tax court. This bill would change the federal tax code so that compensatory damages (everything except punitive damages) received for a sexual act or sexual contact are excluded from taxable income, with no requirement to produce medical records or visible injuries. If a settlement or court order states the money is for sexual act or contact damages, that statement counts as credible evidence and shifts the burden of proof to the IRS. The Treasury Department, working with the DOJ Office on Violence Against Women, would also run a public awareness program so survivors and their attorneys know the exclusion exists. The change applies to decisions and agreements entered into after the bill becomes law.
Civil Liberties
- Tax treatment of survivor civil-suit damages — Non-punitive damages for sexual acts or contact excluded from gross income
- Burden of proof in survivor tax disputes — Settlement statement treated as credible evidence, shifting burden to the IRS
- Documentation requirement for survivor damages — Medical records or observable injuries no longer required for the exclusion
Transparency & Accountability
- Public awareness program — Treasury required to publicize the exclusion in consultation with the DOJ Office on Violence Against Women
Congressional Summary
Survivor Justice Tax Prevention ActThis bill excludes from gross income certain damages received by an individual due to any sexual act or sexual contact and establishes the applicable burden of proof in court proceedings regarding the characterization of such damages for federal tax purposes. Under current law, amounts received as damages (other than punitive damages) from a judgment, award, or settlement of a claim may be excluded from gross income and, thus, are not subject to federal income tax, if attributable to a personal physical injury or physical sickness. The Internal Revenue Service (IRS) generally interprets personal physical injury to require observable bodily harm (e.g., bruising, cuts, swelling, or bleeding).Under the bill, amounts received as damages (other than punitive damages) from a judgment, award, or settlement due to any sexual act or sexual conduct, whether or not there are medical records or observable injuries of such act or contact, may be excluded from gross income.Further, if a judgment, award, or settlement states that damages are due to any sexual act or sexual conduct, then the IRS has the burden of proving otherwise in court proceedings related to the tax liability associated with such damages. Finally, the bill requires the IRS to promote public awareness of the exclusion from gross income of damages related to any sexual act or sexual contact.
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Received in the Senate.
- Action Date
- 2026-04-28
- Date Added
- 2026-04-24
- Source
- Congress.gov →
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