The House’s tax-writing committee considered five bills aimed at improving tax fairness and the taxpayer experience on Wednesday – all advanced with full committee support.
Two bills would revise tax treatment of damages received by sexual assault survivors and certain payments received by disaster victims. A third would extend the current educator deduction to early childhood educators. The final two bills would require the IRS to provide an online “dashboard” for taxpayers and revamp the IRS Whistleblower Program.
Survivor Justice Tax Prevention Act
H.R. 2347, headed up by Representatives Lloyd Smucker (R-PA) and Gwen Moore (D-WI), would revise the treatment of damages received by sexual assault survivors. It would do so by amending IRC § 104(a)(2), which currently allows damages received on account of physical injuries to be excluded from gross income, to also allow exclusion for sexual-assault related damages.
Smucker explained that the bill “corrects a provision in the law that can treat physical injury differently than sexual assault.” He added that the change “provides victims of sexual assault greater tax certainty without forcing them to fight with the IRS and relive the trauma of their case.”
The committee advanced the bill 41-0.
Federal Disaster Tax Relief Act of 2025
H.R. 5366, introduced by Representatives Greg Steube (R-FL), Jimmy Panetta (D-CA), Mike Thomspon (D-CA), and the late Doug LaMalfa (R-CA), would revise the treatment of “qualified net disaster losses” – defined as the excess of qualified disaster-related personal casualty losses over personal casualty gains. These losses would be deductible to the extent that they exceed $500 per casualty.
While the original bill applied to disasters declared after July 4, 2025, the amended version advanced by the committee expands coverage to declarations made beginning on or after December 28, 2019. The treatment applies for declarations made until January 1, 2027.
The bill would also exclude from gross income certain amounts received as qualified wildfire relief payments during tax years beginning after December 31, 2025, and before January 1, 2031.
The bill advanced out of committee 43-0.
Representative Judy Chu (D-CA) proposed a broader measure that she said would “address the full scope of the challenges families are facing as they try to rebuild” – but withdrew her proposal after Chair Jason Smith (R-MO) committed to “continuing working on” disaster relief issues.
Supporting Early-childhood Educators’ Deductions Act
H.R. 5334 would extend to early childhood educators the above-the-line deduction – currently $350 – that is now available to kindergarten-to-12 teachers, instructors, counselors, principals, and aides who work in a school for at least 900 hours per year.
Representative Jimmy Panetta (D-CA) is leading up the bill, along with Representative Brian Fitzpatrick (R-PA) and 22 other co-sponsors. Panetta explained that the deduction “may seem modest, but for educators who routinely and often dip into their own savings to provide classroom supplies, it is going to be a meaningful acknowledgement and support.”
The Joint Committee on Taxation’s Tom Barthold clarified that the deduction would be available for educators in schools and facilities caring for two or more children that do not reside at the facility. Barthold said the bill would cost $648 million over the 10-year budget window.
Representative Moore called the bill “a first step,” stressing that more work is needed to support education.
The bill passed 43-0.
Taxpayer Experience Improvement Act
H.R. 7971, referred to by sponsor Representative David Schweikert (R-AZ) as “the dashboard bill,” is aimed at modernizing how the IRS interacts with taxpayers through a series of technological upgrades. Among the changes are a backlog and wait time dashboard and expanded online access to returns and refund information. The bill would also enhance IRS callback technology and IRS online accounts.
Barthold explained that the timeframes for the IRS to comply with the new requirements vary, with the earliest deadline being 12 months from the date of the bill’s enactment.
The committee advanced the bill 43-0.
IRS Whistleblower Program Improvement Act
Finally, H.R. 7959, headed up by Representatives Mike Kelly (R-PA) and Mike Thompson (D-CA) and backed by the National Whistleblower Center, would make what Kelly called “targeted, practical updates” to improve the IRS Whistleblower Program. That includes “establishing a presumption of an anonymity in Tax Court” for whistleblowers, revising the Tax Court review process for whistleblower awards, and requiring payment of interest on delayed awards. The bill also would provide that attorneys’ fees related to pursuing an award are tax deductible.
“Enforcement capabilities are stretched,” with recent IRS staffing and budget cuts, Thompson noted. “Whether we say it out loud or not, we’re increasingly relying on whistleblowers to fill that gap.” He stressed the need to protect whistleblowers from uncertainty, along with “in some cases, real personal and professional risk.”
Barthold said proposal would cost an estimated $44 million over 10 years. The changes could lead to improved enforcement – and related collections – having a positive revenue impact. But he explained that the costs would come from “somewhat larger awards to whistleblowers” and expanded deductibility of attorneys’ fees.
The bill advanced 41-0.
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