I
119THCONGRESS
1
STSESSION 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
MARCH14, 2025
Ms. S
TEVENSintroduced 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 Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘No Penalties for Vic-4
tims of Fraud Act’’. 5
SEC. 2. WAIVER OF EARLY WITHDRAWAL PENALTIES FOR 6
VICTIMS OF FRAUD. 7
(a) I
NGENERAL.—Section 72(t)(2) of the Internal 8
Revenue Code of 1986 is amended by adding at the end 9
the following new subparagraph: 10
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‘‘(N) DISTRIBUTIONS FROM RETIREMENT 1
PLANS IN CASE OF VICTIM OF FRAUD .— 2
‘‘(i) I
N GENERAL.—Any distribution 3
from an applicable eligible retirement plan 4
to an individual if such distribution is 5
made on account of the individual being a 6
victim of fraud. 7
‘‘(ii) V
ICTIM OF FRAUD .—For pur-8
poses of this subparagraph, the term ‘vic-9
tim of fraud’ means an individual who— 10
‘‘(I) submits an application for 11
waiver to the Secretary (in such time 12
and manner as the Secretary may pre-13
scribe) which fulfils the documenta-14
tion requirement of clause (iii), and 15
‘‘(II) is designated as a victim of 16
fraud by the Secretary. 17
‘‘(iii) D
OCUMENTATION REQUIRE -18
MENT.—The documentation requirement 19
under this clause is fulfilled if the taxpayer 20
provides documentation (in such time and 21
manner as the Secretary may prescribe) 22
from a law enforcement agency or a court 23
of competent jurisdiction establishing that 24
the individual is the victim of a fraudulent 25
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act that resulted in a distribution from an 1
applicable retirement plan. 2
‘‘(iv) A
MOUNT DISTRIBUTED MAY BE 3
REPAID.—Rules similar to the rules of sub-4
paragraph (H)(v) shall apply. 5
‘‘(v) A
PPLICABLE ELIGIBLE RETIRE -6
MENT PLAN.—The term ‘applicable eligible 7
retirement plan’ means an eligible retire-8
ment plan (as defined in section 9
402(c)(8)(B)) other than a defined benefit 10
plan.’’. 11
(b) E
FFECTIVEDATE.—The amendment made by 12
this section shall apply to distributions made after the 13
date of the enactment of this Act. 14
SEC. 3. INFORMATION AND OUTREACH. 15
(a) G
UIDANCE.—Not later than 180 days after the 16
date of the enactment of this Act, the Secretary of the 17
Treasury (or the Secretary’s delegate) shall issue guidance 18
on the process for claiming the waiver of early withdrawal 19
penalties for victims of fraud under section 72(t)(2)(N) 20
of the Internal Revenue Code of 1986, as added by section 21
2 of this Act. 22
(b) P
UBLICAWARENESSCAMPAIGN.—As soon as 23
practicable after the date of the enactment of this Act, 24
the Secretary of the Treasury (or the Secretary’s delegate) 25
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shall conduct a public awareness campaign to educate the 1
public about the protections and relief available under sec-2
tion 72(t)(2)(N) of the Internal Revenue Code of 1986, 3
as added by section 2 of this Act. 4
Æ
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