Doug LaMalfa Protect Innocent Victims of Taxation After Fire Extension Act
Summary
What This Bill Does
The Doug LaMalfa Protect Innocent Victims of Taxation After Fire Extension Act excludes a qualified wildfire relief payment from an individual's federal gross income. Covered compensation can pay for wildfire losses, expenses, or damages, including additional living expenses, specified lost wages, personal injury, death, and emotional distress.
The payment qualifies only to the extent the same loss, expense, or damage is not compensated by insurance or another source. Employer-paid lost wages that the employer otherwise would have paid remain outside the special lost-wage category. A covered payment may be made to or on behalf of the individual.
The underlying fire must be a federally declared disaster declared after December 31, 2014 because of a forest or range fire. The exclusion applies to amounts received after December 31, 2025 and stops for amounts received after December 31, 2032. A payment received during that window can relate to an older qualifying fire.
To prevent double benefits, a taxpayer cannot claim a deduction or credit for an expenditure to the extent a payment for it is excluded, and cannot increase property basis by an excluded amount. The bill has no income cap or dollar cap, does not exclude insurance proceeds twice, does not change settlement liability, and does not protect payments received after 2032.
Who Benefits and How
Wildfire survivors and families retain more compensation for living expenses, lost wages, injury, death, emotional distress, and property-related loss. Settlement recipients and claim administrators gain a clear federal rule for qualifying payments. The exclusion can apply across multiple federally declared fires after 2014.
Who Bears the Burden and How
The Treasury and taxpayers bear foregone revenue. IRS staff, settlement administrators, and recipients must trace payment purpose, declaration date, insurance reimbursement, receipt timing, and denied duplicate benefits. People paid after 2032 receive no exclusion, and recipients cannot also deduct the compensated expenditure or increase basis.
Key Provisions
- Excludes qualified wildfire relief payments from gross income.
- Covers living expenses and specified lost wages.
- Covers personal injury, death, and emotional distress.
- Limits relief to otherwise-uncompensated losses.
- Defines qualifying disasters as federally declared forest or range fires.
- Requires the disaster declaration to occur after 2014.
- Applies to payments received from 2026 through 2032.
- Prohibits duplicate deductions and credits.
- Prohibits basis increases from excluded amounts.
- Provides no income or payment cap.
- Ends the exclusion for receipts after 2032.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
Excludes from federal gross income qualified wildfire compensation received after 2025 and through 2032 for otherwise-uncompensated losses, expenses, damages, injury, death, emotional distress, and specified lost wages from federally declared forest or range fires declared after 2014, while preventing duplicate tax benefits.
Key Policy Areas
Wildfire Disaster Relief, Federal Income Tax, Disaster Compensation, Personal Injury Payments, Tax Benefit Coordination
Primary Purpose
Excludes from federal gross income qualified wildfire compensation received after 2025 and through 2032 for otherwise-uncompensated losses, expenses, damages, injury, death, emotional distress, and specified lost wages from federally declared forest or range fires declared after 2014, while preventing duplicate tax benefits.
Policy Domains
Section 2 qualified payments, disaster definition, no-double-benefit rules, receipt window, and termination
Identified Gains
- Wildfire survivors receiving damage payments
- Wildfire survivors receiving living-expense payments
- Wildfire survivors receiving lost-wage payments
- Wildfire survivors receiving injury payments
- Families receiving wildfire death compensation
- Wildfire claimants receiving emotional-distress payments
- Attorneys resolving wildfire compensation claims
Identified Costs
- United States Treasury
- Federal taxpayers financing foregone revenue
- IRS disaster-tax administration staff
- Claimants documenting insurance reimbursements
- Settlement administrators classifying payments
- Taxpayers denied duplicate deductions
- Recipients paid after December 2032
- States conforming to federal gross income
Sponsors
Legislative Progress
In CommitteeReferred to the House Committee on Ways and Means.
Introduced in House
Mr. Fong (for himself, Mr. Moore of Utah, Ms. Bynum, …
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Claimants documenting insurance reimbursements, Families receiving wildfire death compensation, Recipients paid after December 2032
Positive-direction: Families receiving wildfire death compensation, Wildfire claimants receiving emotional-distress payments, Wildfire survivors receiving damage payments, Wildfire survivors receiving injury payments, Wildfire survivors receiving living-expense payments, Wildfire survivors receiving lost-wage payments
Negative-direction: Claimants documenting insurance reimbursements
Attorneys resolving wildfire compensation claims, Settlement administrators classifying payments, Wildfire compensation administrators
Positive-direction: Attorneys resolving wildfire compensation claims
Negative-direction: Settlement administrators classifying payments
IRS disaster-tax administration staff, United States Treasury
Federal taxpayers financing foregone revenue, Taxpayers
States conforming to federal gross income
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "payer"
- → Entity paying or administering wildfire compensation
- "family"
- → Person receiving compensation related to wildfire death
- "insurer"
- → Insurer compensating a covered loss
- "recipient"
- → Individual receiving compensation for a qualifying wildfire
- "administrator"
- → IRS official reviewing the exclusion
Note: {'scope_ids': ['wildfire_compensation_tax_exclusion'], 'description': 'The exclusion depends on payment receipt timing and uncompensated loss rather than the fire date alone, excludes ordinary employer-paid wages, denies duplicate tax benefits and basis increases, and expires for amounts received after 2032.'}
Key Definitions
Terms defined in this bill
The period after December 31, 2025 and before January 1, 2033 during which a qualifying payment receives the exclusion.
Otherwise-uncompensated payment to or for an individual for listed loss, expense, damage, injury, death, distress, or lost wages from a qualified wildfire disaster.
A federally declared disaster declared after 2014 as a result of a forest or range fire.
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
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