The Senate on November 20 approved, by unanimous consent, a measure to repeal the sunset of an exclusion from federal income tax for restitution received by Holocaust victims. The Holocaust Restitution Tax Fairness Bill (Sen 2577) makes permanent the provision originally included in the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) (P.L. 107-16).

The House approved similar legislation (HR 4823) by voice vote on June 4 (TAXDAY, 2002/06/05, C.1). The legislation can now move to President Bush's desk for his expected signature.


The federal government should not receive a financial windfall from Holocaust payments, the House bill's sponsor, House Ways and Means Social Security Subcommittee Chairman E. Clay Shaw, Jr. (R-Fla.), stated in a November 21 press release. Sunsetting the EGTRRA tax cuts creates uncertainty in tax planning for Holocaust survivors and their families, he added.

There will be an estimated 88,000 Holocaust survivors in 2010 when the tax cut would have sunset, according to Shaw. Exempting Holocaust payments will cost $3 million in federal tax revenues for 2012, according to the Joint Committee on Taxation.


December 18, 2002

NEWS RELEASE from 107th CongressE. Clay Shaw, Jr.

22nd Congressional District, Florida

For Immediate Release

December 17, 2002

Contact: Wendy Rosen

(202) 225-3026

President Signs Rep. Shaw's Tax Bill

Tax Free Restitution Payments for Holocaust Survivors Made Permanent

Washington, D.C.
--Today, the President will sign the Holocaust Restitution Tax Fairness Act, authored by Rep. Clay Shaw (R-FL), Chairman of the Ways and Means Social Security Subcommittee. This legislation, passed in both the House and the Senate with overwhelming support, forever exempts Holocaust survivors and their heirs from paying taxes on restitution claims.

"I am grateful to the President for signing this bill in short order. While no amount of money could ever begin to compensate for the suffering of Holocaust survivors, it would be an absolute injustice for these claims to be taxed--when something is stolen from you, you simply shouldn't have to pay taxes when it's returned," said Shaw. "This bill would make sure that survivors and their heirs will receive full compensation for their suffering, not just for a limited amount of time - but for all time," he added.

This bill, H.R. 4823, makes permanent a provision originally passed as part of President Bush's 2001 tax cut (the Economic Growth and Tax Relief Reconciliation Act or EGTRRA). Due to an arcane Senate rule, the entire tax cut could be repealed in ten years. Rep. Shaw's Bill shields all restitution payments received from the Nazi Regime by victims or their heirs. Current estimates are that there will be 88,000 Holocaust survivors in 2010 when the tax relief would have expired or "sunset". Without this permanent provision, any restitution payments would have been subject to federal taxation.

"I am honored to have introduced this legislation and am deeply satisfied knowing that these survivors will now have the security of knowing their settlement claims that will not be reduced by taxes," Shaw said

Jay J. Sangerman, PLLC
171 East 84th Street, Suite 21B
New York, New York 10028
212-439-0056 - facsimile