Larson Opening Statement at Markup of H.R. 9500

(As prepared for delivery) 

Thank you, Ranking Member Neal.

This bill rectifies a problem that has existed since 2018, the limitation of the casualty loss deduction.

This deduction’s current status, limiting the deduction to only Presidentially declared disasters, results in Americans from all across the country paying taxes on money that is stolen from them and recovering from disasters that impact their property. 

This bill will rectify this limitation and return us to longstanding precedent. When someone suffers a grievous financial loss, it doesn’t matter to that individual if it is caused by a Presidentially declared disaster. To that individual, it’s catastrophic either way. 

It also contains new and common sense reforms to ensure that victims of fraud and theft are further protected from an unfair taxes. 

The Casualty Loss deduction is a particularly important issue for myself, Ranking Member Neal, our colleague Joe Courtney, and other Representatives in the northeast. 

Tens of thousands of homeowners in our districts, and Ranking Member Neal’s districts are dealing with a unique issue that threatens their homes and their finances. 

These homeowners, through no fault of their own, are dealing with crumbing home foundations. Unbeknownst to them, the concrete used in those foundations contained pyrrhotite, which we now know crumbles over time and pressure. 

Now, they are dealing with exorbitant bills to replace their foundations. 

In 2017, Rep. Courtney and I worked with the IRS to confirm that these costs were eligible to use the Casualty Loss Deduction. 

Unfortunately, shortly after we secured that confirmation, the Casualty Loss deduction was limited to Stafford act area disasters, which does not apply to crumbling foundations.

As a result, these homeowners have been locked out of tax relief for the last five years. 

In addition to broadly repealing the casualty loss limitation and adding support for victims of fraud, the bill before us also includes a lookback provision for those impacted by pyrrhotite, ensuring that they are able to deduct their expenses, even if they occurred in the past. 

I would like to enter into the record a statement by Rep. Courtney, with whom I have worked closely with and who has been champion for his constituents on this issue.   

More than a decade since the crumbling foundations crisis was first discovered in Eastern and North Central Connecticut, as many as 35,000 homes and condos have been affected.

Still, only a little more than 1,000 foundations have been replaced.

This legislation will go a long way to provide tax relief so more homeowners can afford to make the repairs they need, and those who already replaced their foundations can be made whole.

I want to thank Mr. Suozzi, Mr. Miller, Chairman Smith, Ranking Member Neal and their staffs for working with me on this legislation to include this vital provision.

I yield back.

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