H.R. 2347, Survivor Justice Tax Prevention Act

H.R. 2347 would allow survivors of sexual acts or sexual contact to exclude from their taxable income any resulting compensatory damages they have received. Under current law, compensatory damages are excluded from taxable income when received for physical injury or illness. Under the bill, survivors of sexual misconduct whose injuries are not documented as physical would not be required to pay income tax on any damages they receive. The bill also would require the Secretary of the Treasury, in coordination with the Department of Justice’s Office on Violence Against Women, to inform eligible filers of the new exclusion.

The Congressional Budget Act of 1974, as amended, stipulates that revenue estimates provided by the staff of the Joint Committee on Taxation (JCT) are the official estimates for all tax legislation considered by the Congress. CBO therefore incorporates such estimates into its cost estimates of the effects of legislation. The revenue estimates for H.R. 2347 were provided by JCT.

The estimated budgetary effects of the legislation are shown in Table 1. The costs of the legislation fall within budget function 800 (general government).

JCT estimates that enacting H.R. 2347 would reduce revenues by $89 million over the 2026‑2036 period.[1]

Using information from JCT and the Internal Revenue Service (IRS), CBO estimates that implementing H.R. 2347 would increase the IRS’s administrative costs by less than $500,000 annually and over the 2026-2031 period. Any related spending would be subject to the availability of appropriated funds.

The CBO staff contact for this estimate is Ellen Steele. The estimate was reviewed by John McClelland, Director of Tax Analysis.