Senate passes bill to stop IRS from imposing penalties on American hostages, detainees

The U.S. Senate passed a bill last week that would stop the Internal Revenue Service (IRS) from imposing fines and penalties on American hostages and wrongful detainees for late tax payments while they are held abroad.

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The Stop Tax Penalties on American Hostages Act, sponsored by Sens. Mike Rounds (R-SD) and Chris Coons (D-DE), was approved unanimously.

“Our bipartisan work over the last few years to provide commonsense relief for Americans held hostage or wrongfully detained has finally cleared the Senate,” Rounds said. “For obvious reasons, any American held hostage abroad should not have the heavy hand of the IRS hunting down and charging penalties on missed federal tax payments. While we will continue our efforts to get hostages back, especially from countries like Russia, China and Venezuela, this legislation will protect Americans from misguided statutory requirements and unnecessary red tape when they return home. I urge my colleagues in the House to pass this bill as quickly as possible.”

In addition to Rounds and Coons, the Stop Tax Penalties on American Hostages Act is cosponsored by U.S. Sens. Ron Wyden (D-OR), Thom Tillis (R-NC), Ben Cardin (D-MD), Bill Cassidy (R-LA), and Rick Scott (R-FL).

“Coming home from being held hostage or wrongfully detained abroad to find that your government has penalized you for being unable to pay your taxes is a moral outrage. I’m glad that my colleagues agree and that the Stop Tax Penalties on American Hostages Act has been unanimously cleared by the Senate,” Coons said. “I urge my colleagues in the House to pass this important bipartisan legislation and join me in supporting Americans unjustly held abroad.”

By unanimous consent, the bill will now be held in the Senate, since the U.S. Constitution requires that tax bills originate in the House. If the House of Representatives passes an identical bill, the House bill will be deemed to have passed the Senate and will be sent immediately to the President’s desk for his signature.

“While I don’t believe there was ever any ill intent by the U.S. government to penalize those of us who have been wrongfully detained abroad, there was also no remedy for a challenge just about all of us face upon our return home,” Jason Rezaian, a former hostage himself, said. “I’m heartened that the Senate has chosen to correct an oversight that has affected so many American victims of state-sponsored terror. I hope the House of Representatives follows suit and acts soon to support American survivors of foreign state hostage-taking.”

Rezaian, a journalist with the Washington Post, was wrongly imprisoned in Iran for 544 days, convicted of espionage in 2014.

The House bill (H.R.7791) is cosponsored by U.S. Reps. Dina Titus (D-NV), Claudia Tenney (R-NY), Donald Beyer (D-VA), Haley Stevens (D-MI), and French Hill (R-AR).