New Bill Seeks Financial Relief for Wrongfully Detained Americans Facing IRS Penalties

A new bipartisan bill seeks to alleviate financial burdens for Americans wrongfully detained abroad, as they face unexpected IRS penalties upon their return home.

At a Glance

The “Stop Tax Penalties on American Hostages Act” aims to prevent IRS penalties for wrongfully detained Americans
Senators Chris Coons (D-DE) and Mike Rounds (R-SD) introduced the bipartisan legislation
The bill addresses tax penalties, credit score impacts, and Social Security benefit reductions
Additional bills target credit score protection and retirement security for detainees
Challenges remain in passing the legislation through the House of Representatives

Bipartisan Effort to Protect Wrongfully Detained Americans

Senators Chris Coons (D-DE) and Mike Rounds (R-SD) have introduced the “Stop Tax Penalties on American Hostages Act,” a bipartisan bill aimed at providing crucial financial relief for Americans wrongfully detained abroad. This legislation addresses the often-overlooked financial hardships faced by individuals like Evan Gershkovich, Paul Whelan, and Vladimir Kara-Murza upon their return home. The act seeks to prevent the IRS from imposing hefty penalties and fees on these Americans who have already endured unjust imprisonment in foreign countries.

Senator Coons highlighted real cases to illustrate the need for this legislation, including that of Washington Post reporter Jason Rezaian, who faced significant IRS penalties after his detention in Iran. The bill has successfully cleared the Senate but now faces challenges in the House of Representatives.

Americans held hostage or wrongfully detained shouldn’t be treated like tax cheats. A bill would prevent the IRS from imposing late penalties on former hostages and wrongful detainees, writes @ChrisCoons https://t.co/uYXP2qqTRQ

— Wall Street Journal Opinion (@WSJopinion) October 1, 2024

Comprehensive Approach to Financial Protection

In addition to addressing IRS penalties, the legislation is part of a broader effort to protect wrongfully detained Americans from various financial hardships. Complementary bills include the Fair Credit for American Hostages Act and the Retirement Security for American Hostages Act, which address credit scores and Social Security benefits, respectively.

“Americans held hostage or wrongfully detained shouldn’t be treated like tax cheats. That’s why in March I introduced the Stop Tax Penalties on American Hostages Act with Republican Sen. Mike Rounds of South Dakota. The bill would prevent the IRS from imposing late penalties on former hostages and wrongful detainees.” – Senator Chris Coons

The IRS currently requires legislative changes to stop imposing penalties on wrongfully detained Americans, making this bill a crucial step in protecting these individuals from further financial harm upon their return home.

House Introduces No Funding Without Freedom Act

In a related development, a separate House bill, the No Funding Without Freedom Act, aims to halt U.S. aid to Afghanistan until wrongfully detained Americans are released. This legislation, introduced by Rep. Dan Meuser, a Pennsylvania Republican, would require the State Department to provide regular updates on unlawfully detained American citizens in Afghanistan.

“Last month marked three years since the Biden-Harris administration’s disastrous withdrawal from Afghanistan, which allowed the Taliban to seize control of the country. And despite the Taliban’s wrongful imprisonment of Americans like Ryan Corbett and George Glezmann, this administration has continued to provide billions of dollars in humanitarian aid to the terror group,” Meuser said.

Cases like Ryan Corbett and George Glezmann in Afghanistan highlight the ongoing issue of Americans detained abroad facing health and legal challenges. The U.S. has provided over $2.6 billion in humanitarian aid to Afghanistan since the 2021 withdrawal of U.S. military forces, a fact that has drawn criticism from supporters of the No Funding Without Freedom Act.

Growing Awareness and Support

The introduction of these bills reflects a growing awareness of the challenges faced by Americans wrongfully detained abroad. President Biden recently signed a law establishing March 9 as National Hostage and Wrongful Detainee Day, emphasizing the importance of this issue. As these legislative efforts move forward, they represent a significant step in providing comprehensive support for Americans who have endured unjust detention in foreign countries and now face unexpected financial burdens upon their return home.