Restitution Payments for Holocaust Survivors

Made Permanent

WASHINGTON - Last night, the Senate passed the Holocaust Restitution Tax Fairness Act, under unanimous consent. Rep. E. Clay Shaw (R-FL), Chairman of the Ways and Means Social Security Subcommittee, sponsored this legislation in the House, which passed on June 4, 2002 with a vote of
392 - 1.

“Although no amount of money could ever compensate the victims of the Holocaust for the crimes committed against them, it would be wrong for the United States Tax Code to treat these modest settlements as some sort of financial windfall,” said Shaw.

This bill, H.R. 4823, will make permanent provisions originally passed as part of President Bush's 2001 tax cut (the Economic Growth and Tax Relief Reconciliation Act). These provisions excluded from taxation restitution payments received by victims of the Nazi Regime or their heirs or estates. These tax relief provisions expire or “sunset” on December 31, 2010. After that, any restitution payments could be subject to federal taxation.

The sunset of the tax provisions in EGTRRA creates significant risk and uncertainty for tax planning for all taxpayers. Victims of the Holocaust and their families who receive restitution payments face even greater uncertainty without tax cut permanency.

“Current estimates are that there will be 88,000 Holocaust survivors in 2010 when the tax cuts sunset. Congress has given these survivors the security of at least knowing that their settlement claims will not be reduced by taxes,” Shaw said.

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