When someone’s money is stolen during a scam, the harm doesn’t stop at the theft itself. The tax system can unintentionally compound a victim’s financial loss. For many victims of cybercrime, including identity theft and scams, tax laws still treat stolen funds or coerced withdrawals as income, leading to unexpected tax bills, reduced benefits, and intense stress in an already overwhelming situation. This unfair consequence affects tens of thousands of people nationwide and often hits those on fixed incomes the hardest.
CyberSecurity and Scams