Why Are U.S. Legislators So Reluctant to Promote the Federal Casualty Loss Program?

The Federal Casualty Loss Program, reported through IRS Form 4684, allows taxpayers to claim deductions for losses resulting from federally declared disasters. Despite its potential benefits, many people remain unaware of this program. This lack of awareness raises questions about why some U.S. Legislators seem hesitant to promote the program.

Don't Tell

None of the communication we've received from US Senators and Representatives in disaster areas like Florida, North Carolina, New Mexico and Hawaii contain any mention of the Federal Casualty Loss Program.

This baffles us.

We've written to all of them with no response, and their "Disaster Recovery" emails continue to ignore the program. We wondered why and decided to look at this more closely.

Complexity and Misunderstanding

One reason for the reluctance could be the complexity of the tax code and the specific requirements for claiming casualty losses. The rules surrounding Form 4684 are intricate, involving calculations of the decrease in fair market value of the property, insurance reimbursements, and specific thresholds like the $100 and 10% AGI reduction rules. This complexity could lead to misunderstandings and misapplications, potentially causing confusion among constituents.

This is why we provide a free Tax Recovery Estimator. This tool makes it easy for you (and your congressperson) to understand the value of the program and to calculate exactly how much you might recover under it. We also make it easy to get the required "Competent Appraisal" (AKA a Loss Report) required to file.

Legislative Changes and Limitations

The Tax Cuts and Jobs Act (TCJA) of 2017 significantly altered the landscape for casualty loss deductions. For tax years 2018 through 2025, the deduction is limited to losses resulting from Federally Declared disasters. This limitation reduces the number of eligible claims, which might make the program seem less beneficial to the public. Additionally, ongoing legislative changes can create uncertainty about the program's future, making it a less stable topic for congressmen to promote.

BUT, that means ignoring millions of dollars in aid - Money that will never reach their constituents!

Political and Economic Considerations

Promoting tax deductions for casualty losses can also have political and economic implications. Encouraging constituents to claim these deductions could be seen as promoting government spending, which might not align with the fiscal policies of some legislators. Additionally, there is a concern that widespread use of these deductions could reduce federal revenue, impacting budget allocations for other programs.

But is that really a good justification for denying people what is rightly theirs?

Focus on Immediate Disaster Relief

Congressmen might also prefer to focus on disaster relief efforts that provide more immediate and visible benefits to their constituents as it makes them look good. Programs that offer direct financial aid, infrastructure rebuilding, and community support can be more politically advantageous and easier to communicate than the nuanced benefits of tax deductions.

Let's face it -- Tax Refunds are just not "sexy".

This is unfortunate since, beyond insurance coverage, the Federal Casualty Loss program offers the only opportunity for most disaster victims to get some money that they don’t need to repay!

Conclusion

We’ll be honest.

We still don’t get it.

Every legislator in a disaster area should be trumpeting this program from what’s left of their rooftop.

But they aren’t. Instead it's like they’re hiding the program!

While the Federal Casualty Loss Program offers valuable tax relief for those affected by disasters, its complexity, legislative limitations, and political implications probably contribute to why some legislators are hesitant to actively promote it. They probably don't understand it themselves. Understanding these factors can help constituents better navigate the available resources and advocate for clearer communication and support from their representatives.

Want to tell your legislators about the program?

You can get a list of your legislators at https://www.usa.gov/elected-officials

This gives you phone numbers, facebook address, X address and websites to contact them.

Maybe you'll have better luck than we did. We hope so. There's millions of dollars in aid to disaster victims that goes unused because no one wants to tell them about it.

Maybe the politicians aren’t willing to help you with the program, but we are!

Here’s some good links to tell you about the program:

https://www.irs.gov/forms-pubs/about-form-4684: Overview of Form 4684 https://www.irs.gov/instructions/i4684: IRS Instructions for Form 4684

And the rest of our website is devoted to tools to help you navigate the process.

And we're here to help. While legislators seem to have made it increasingly difficult to reach them, we want to make it easy for you to find help.

You can reach us at info@disaster-relief.us or call us at 505.490.2011