H.R. 2163

119 HR 2163 IH: No Penalties for Victims of Fraud Act
 U.S. House of Representatives
 2025-03-14
 text/xml
 EN
 Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
 I  119th CONGRESS  1st Session  H. R. 2163  IN THE HOUSE OF REPRESENTATIVES   March 14, 2025   Ms. Stevens  introduced the following bill; which was referred to the  Committee on Ways and Means    A BILL
To amend the Internal Revenue Code of 1986 to waive early withdrawal penalties from retirement accounts for victims of fraud.
1.
Short title
This Act may be cited as the   No Penalties for Victims of Fraud Act  .
2.
Waiver of early withdrawal penalties for victims of fraud
(a)
In general
 Section 72(t)(2)  of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:
(N)
Distributions from retirement plans in case of victim of fraud
(i)
In general
Any distribution from an applicable eligible retirement plan to an individual if such distribution is made on account of the individual being a victim of fraud.
(ii)
Victim of fraud
For purposes of this subparagraph, the term  victim of fraud  means an individual who—
(I)
submits an application for waiver to the Secretary (in such time and manner as the Secretary may prescribe) which fulfils the documentation requirement of clause (iii), and
(II)
is designated as a victim of fraud by the Secretary.
(iii)
Documentation requirement
The documentation requirement under this clause is fulfilled if the taxpayer provides documentation (in such time and manner as the Secretary may prescribe) from a law enforcement agency or a court of competent jurisdiction establishing that the individual is the victim of a fraudulent act that resulted in a distribution from an applicable retirement plan.
(iv)
Amount distributed may be repaid
Rules similar to the rules of subparagraph (H)(v) shall apply.
(v)
Applicable eligible retirement plan
The term  applicable eligible retirement plan  means an eligible retirement plan (as defined in section 402(c)(8)(B)) other than a defined benefit plan.
 .
(b)
Effective date
The amendment made by this section shall apply to distributions made after the date of the enactment of this Act.
3.
Information and outreach
(a)
Guidance
Not later than 180 days after the date of the enactment of this Act, the Secretary of the Treasury (or the Secretary’s delegate) shall issue guidance on the process for claiming the waiver of early withdrawal penalties for victims of fraud under  section 72(t)(2)(N)  of the Internal Revenue Code of 1986, as added by section 2 of this Act.
(b)
Public awareness campaign
As soon as practicable after the date of the enactment of this Act, the Secretary of the Treasury (or the Secretary’s delegate) shall conduct a public awareness campaign to educate the public about the protections and relief available under  section 72(t)(2)(N)  of the Internal Revenue Code of 1986, as added by section 2 of this Act.