It was the kind of financial horror story that arrives in two acts. First, the scammer. Then, the tax bill.
A woman — identified in a July 2026 opinion piece in The Hill by her attorney — was defrauded of her life savings by a romance scammer, the kind of elaborate long-con now supercharged by AI-generated personas and weeks of manufactured intimacy. When the money was gone, she had nothing left. What she did have, according to her lawyer, was a tax liability on funds the government considered income — funds she would never see again.
The underlying problem is a quirk in the federal tax code that legal advocates have flagged for years but that Congress has not moved to fix. Victims of investment fraud — Ponzi schemes, for instance — can claim theft-loss deductions under existing rules. Victims of romance scams, confidence fraud, and other deceptions built on personal trust largely cannot. The distinction, critics say, rewards the kind of fraud that wears a business suit and penalizes the kind that wears a wedding ring.
The attorney behind the piece argues that the gap has become increasingly urgent as AI tools allow scammers to operate at industrial scale — holding down multiple fake relationships simultaneously, generating synthetic voice messages, even producing fake video calls. The Federal Trade Commission reported that romance scam losses in the United States topped $1.1 billion in 2023, a figure widely considered an undercount.
No bill targeting the deduction disparity is currently before Congress. The lawyer's piece calls on legislators to amend the tax code to treat all fraud victims equally, regardless of what the fraudster promised them — love or returns.
The woman's case remains unresolved.