Senate passes Rounds’ bill to end taxes on U.S. hostages

The U.S. Senate on April 30 approved a bipartisan bill cosponsored by U.S. Sen. Mike Rounds (R-SD) that would prohibit federal tax penalties being imposed on Americans wrongfully detained abroad.

“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,” said Sen. Rounds. “I urge my colleagues in the House to pass this bill as quickly as possible.”   

The Stop Tax Penalties on American Hostages Act of 2024, S. 4057, which is sponsored by U.S. Sen. Chris Coons (D-DE), would prohibit the Internal Revenue Service from imposing fines and penalties on American hostages and wrongful detainees cited for late tax payments while held abroad, according to a bill summary provided by Sen. Rounds’ staff.

In addition to Sen. Rounds, original cosponsors of S. 4057 include U.S. Sens. Thom Tillis (R-NC) and Bill Cassidy (R-LA). 

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

“Our bipartisan work over the last few years to provide common-sense relief for Americans held hostage or wrongfully detained has finally cleared the Senate,” Sen. 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.”

In the House, the same-named H.R. 7791 was introduced on March 22 by U.S. Reps. French Hill (R-AR) and Dina Titus (D-NV).

The Bring Our Families Home Campaign and the James W. Foley Legacy Foundation endorsed the measure.

“I’m glad that my colleagues agree and that the Stop Tax Penalties on American Hostages Act has been unanimously cleared by the Senate,” said Sen. Coons. “I urge my colleagues in the House to pass this important bipartisan legislation and join me in supporting Americans unjustly held abroad.”