[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2163 Introduced in House (IH)]

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119th CONGRESS
  1st Session
                                H. R. 2163

 To amend the Internal Revenue Code of 1986 to waive early withdrawal 
        penalties from retirement accounts for victims of fraud.


_______________________________________________________________________


                    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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``No Penalties for Victims of Fraud 
Act''.

SEC. 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.

SEC. 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.
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