Senators Coons, Rounds Reintroduce Financial Protection Legislation for American Hostages and Wrongful Detainees
U.S. Senator Chris Coons along with Republican Senator Mike Rounds of South Dakota reintroduced the Stop Tax Penalties on American Hostages Act today to prevent the Internal Revenue Service (IRS) from imposing fines or penalties on American hostages and wrongful detainees for late tax payments while they are held abroad. This bill was originally introduced in December 2022, and the Senate unanimously cleared the bill last year. Senator Coons says this bipartisan legislation will fix a glaring flaw in our tax code to ensure that Americans who have already been through the unthinkable do not face thousands of dollars in fines and late fees from the IRS for non-payment of taxes.
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In addition to Senators Coons and Rounds, this legislation is co-sponsored by Senators Thom Tillis (R-N.C.), Ron Wyden (D-Ore.), Bill Cassidy, M.D. (R-La.), Chris Van Hollen (D-Md.), Rick Scott (R-Fla.), John Fetterman (D-Pa.), and Dave McCormick (R-Pa.).
“When you return to the United States after being held hostage or wrongfully detained overseas, the first thing that you should get from your government is a ‘welcome home.’ Instead, it’s usually a fine from the IRS for failing to pay your taxes while you sat in a foreign jail,” said Senator Coons. “This bipartisan legislation will fix a glaring flaw in our tax code to ensure that Americans who have already been through the unthinkable do not face thousands of dollars in fines and late fees from the IRS for non-payment of taxes. As we continue our work to bring home every wrongfully detained American, I encourage my colleagues to once again advance this bill and ensure we don’t make their re-entry to our country harder than it already is.”
“After returning home, American citizens who were held hostage or wrongfully detained should be spending time with their families and getting back to their lives, not worrying about late fees on their taxes,” said Senator Rounds. “For obvious reasons, any American held hostage should not have the heavy hand of the IRS charging penalties on missed federal tax payments. Our legislation will protect Americans from misguided statutory requirements and unnecessary red tape when they return home.”
“After returning home, American hostages and wrongful detainees should not have to face penalties for taxes missed while held abroad,” said Representative French Hill. “I am proud to introduce this bipartisan legislation that will correct a crucial gap in our laws that burdens these Americans with penalties and fines from the IRS after they return home.”
“It goes without saying that no one who has endured wrongful detention or been taken hostage abroad should face the additional trial of navigating onerous tax burdens they incurred by no fault of their own when they return,” said Representative Dina Titus. “This commonsense, bicameral, bipartisan legislation will eliminate that unthinkable possibility by simplifying the tax code to postpone tax deadlines and refund late fees to support wrongful detainees, hostages, and their families.”
“Hostage US strongly supports the Stop Tax Penalties on American Hostages Act. As the leading organization providing reintegration support, guidance, and resources to Americans held hostage or wrongfully detained abroad, we see firsthand the long-term impact captivity has on individuals and their loved ones. This critical piece of legislation prevents unjust tax burdens when hostages return home and means former captives can rebuild their lives without additional hardship. Americans who have endured captivity should have financial protections and this commonsense legislation will provide much-needed relief to those who have already suffered so much,” said Liz Cathcart, Executive Director of Hostage US.
“On behalf of all U.S. nationals returning from captivity abroad and the James W. Foley Legacy Foundation, I sincerely commend Senator Coons’ and Senator Rounds’ leadership and their staff for this bill prohibiting tax penalties for hostages and wrongful detainees as an essential step forward,” said Diane Foley, Founder and President of the James W. Foley Legacy Foundation.
Americans who are held abroad as hostages or wrongful detainees are fined and charged interest by the IRS in the event of non-payment of taxes while in prison or captivity abroad, as though they had simply chosen not to pay taxes. Jason Rezaian, a Washington Post reporter who was wrongfully detained by the Iranian government for more than a year, brought this issue to Senator Coons’ attention. When Rezaian came home in 2016, the IRS hit him with tens of thousands of dollars in fines and interest charges on taxes he wasn’t able to file while imprisoned. The IRS has made clear a legislative fix is needed to resolve this situation.
Senator Coons has led numerous bills supporting American hostages and wrongful detainees and addressing financial hardships they often face upon their return. He reintroduced the Stop Tax Penalties on American Hostages Act alongside two other hostage bills today: the Fair Credit for American Hostages Act and Retirement Security for American Hostages Act. The first is a bill with Senator Thom Tillis (R-N.C.) that would empower former hostages and detainees to restore credit scores that may have been negatively impacted during their detention. The latter is a bill with Senator Bill Cassidy, M.D. (R-La.) that would ensure that hostages and wrongful detainees are not penalized in calculating their Social Security benefits.
A one-pager is available here.
The full text of the legislation can be found here.
Fair Credit for American Hostages Act
U.S. Senators Chris Coons (D-Del.) and Thom Tillis (R-N.C.) reintroduced the Fair Credit for American Hostages Act today to protect the credit scores of Americans who have been held hostage or wrongfully detained abroad. In addition to Senators Coons and Tillis, this legislation is co-sponsored by Senators Ron Wyden (D-Ore.), Cynthia Lummis (R-Wyo.), Chris Van Hollen (D-Md.), and Mike Rounds (R-S.D.). This legislation was originally introduced in the 118th Congress, and passed the Senate unanimously in December.
“When you’re held hostage or wrongfully detained in a foreign prison for months or years on end, you’re not thinking about whether there’s enough money coming into your bank account to pay your utility bill—but right now, financial institutions just see someone who’s not paying their bills. Americans who’ve already endured the trauma of wrongful detention abroad shouldn’t come home to find their credit score ruined,” said Senator Coons. “The Fair Credit for American Hostages Act addresses this injustice, providing crucial protection for these heroic Americans and their families who have already endured far too much, so that time spent in foreign detention doesn’t harm their financial futures long after they’re home.”
“No one should ever have to fear returning home to financial ruin and a damaged credit history due to their inability to make timely payments while being held hostage in a foreign country,” said Senator Tillis. “This commonsense legislation ensures that Americans held captive abroad won’t have to grapple with the financial distress of a ruined credit score, so they can focus on rebuilding their lives.”
“Hostage US strongly supports the Fair Credit for American Hostages Act. As the leading organization providing reintegration support, guidance, and resources to Americans held hostage or wrongfully detained abroad, we see firsthand the long-term impact captivity has on individuals and their loved ones. This critical piece of legislation prevents damaged credit when hostages return home and means former captives can rebuild their lives without additional hardship. Americans who have endured captivity should have financial protections and this commonsense legislation will provide much-needed relief to those who have already suffered so much,” said Liz Cathcart, Executive Director of Hostage US.
“The Foley Foundation appreciates Senator Coons’ consistent, bipartisan leadership to address the often profound challenges faced by Americans who survive unjust captivity abroad. These bills offer common sense solutions to the financial issues former hostages face as they seek to restore their lives and livelihoods,” said Benjamin Gray, Executive Director of the Foley Foundation.
Americans who are held hostage or wrongfully detained abroad often cannot pay their bills while in detention. Upon their release and return to the United States, many find that their credit scores have suffered due to missed payments. This bipartisan legislation would prevent credit rating agencies from considering payments missed during the detention of Americans who have been held hostage or wrongfully detained abroad.
Senator Coons has led numerous bills supporting American hostages and wrongful detainees and addressing financial hardships they often face upon their return. He reintroduced the Fair Credit for American Hostages Act alongside two other hostage bills today––the Stop Tax Penalties on American Hostages Act and Retirement Security for American Hostages Act. The first is a bill with Senator Mike Rounds (R-S.D.) that would stop the IRS from imposing fines and penalties on American hostages and wrongful detainees for late tax payments while they are held abroad. This bill unanimously cleared the Senate last year. The latter is a bill with Senator Bill Cassidy, M.D. (R-La.) that would ensure that hostages and wrongful detainees are not penalized in calculating their Social Security benefits.
A one-pager is available here.
The full text of the legislation can be found here.
Senators Coons, Cassidy, reintroduce the Retirement Security for American Hostages Act
Today, U.S. Senators Chris Coons (D-Del.) and Bill Cassidy, M.D. (R-La.) reintroduced the Retirement Security for American Hostages Act to ensure American hostages and wrongful detainees don’t see reduced Social Security earnings as a result of being unlawfully held abroad. In addition to Senators Coons and Cassidy, this legislation is co-sponsored by Senators Tim Kaine (D-Va.), Susan Collins (R-Maine), and Ron Wyden (D-Ore.). This legislation was previously introduced in the 118th Congress.
“The financial impact of wrongful detention doesn’t end when Americans come home – the damage can last into their years of retirement,” said Senator Coons. “Americans like Paul Whelan – unjustly held in a Russian prison for six years until the Biden Administration secured his release – see severely reduced Social Security benefits for the rest of their lives and have precious little time to make those earnings back. The Retirement Security for American Hostages Act provides a straightforward and practical solution so that years spent in foreign detention don’t translate into permanently reduced retirement benefits for these Americans who have already suffered so much.”
“Losing one’s freedom is enough to endure. Americans held hostage should not also lose their Social Security benefits,” said Senator Cassidy. “Ensuring their benefits are protected makes a difference in someone’s life.”
“Hostage US strongly supports the Retirement Security for American Hostages Act. As the leading organization providing reintegration support, guidance, and resources to Americans held hostage or wrongfully detained abroad, we see firsthand the long-term impact captivity has on individuals and their loved ones. This critical piece of legislation prevents reduced retirement security when hostages return home and means former captives can rebuild their lives without additional hardship. Americans who have endured captivity should have financial protections and this commonsense legislation will provide much-needed relief to those who have already suffered so much,” said Liz Cathcart, Executive Director of Hostage US.
“The lives of Americans held hostage or wrongfully detained are forever altered in damaging ways that can continue upon their release and return home,” said Diane Foley, President, the James W. Foley Legacy Foundation. “This bill provides an important measure of relief to reduce the burdens faced by those who are lucky enough to be freed.”
Last summer, several Americans were released from wrongful detention in Russia as part of a historic prisoner exchange, and additional Americans have been released from hostage situations since then. These individuals now face financial obstacles resulting from their captivity, including diminished Social Security benefits when they reach retirement. Because they may not have received a paycheck or paid payroll taxes while in captivity, their Average Indexed Monthly Earnings (AIME), which determines their Social Security benefit upon retirement, may have diminished by a meaningful amount.
The Retirement Security for American Hostages Act would amend the Social Security Administration’s (SSA) calculation of benefits for individuals identified as wrongful detainees by the federal government. The bill ensures that when calculating Social Security benefits, the SSA would assume “deemed wages” equal to the national average for each month a former hostage or detainee was held, preventing unjust reductions in their retirement benefits.
Senator Coons has led numerous bills supporting American hostages and wrongful detainees and addressing financial hardships they often face upon their return. He reintroduced the Retirement Security for American Hostages Act alongside two other hostage bills today–– the Fair Credit for American Hostages Act and the Stop Tax Penalties on American Hostages Act. The first is a bill with Senator Thom Tillis (R-N.C.) that would empower former hostages and detainees to restore credit scores that may have been negatively impacted during their detention. The latter is with Senator Mike Rounds (R-S.D.) and would stop the IRS from imposing fines and penalties on American hostages and wrongful detainees for late tax payments while they are held abroad. Both of those bills unanimously cleared the Senate last year.
A one-pager is available here.
The full text of the legislation can be found here.