“To amend the Internal Revenue Code of 1986 to waive early withdrawal penalties from retirement accounts for victims of fraud.”
No CRS summary available for this bill.
This section waives the 10% additional tax on early distributions from applicable eligible retirement plans (i.e., eligible retirement plans such as IRAs and 401(k)s, excluding defined benefit plans) for victims of fraud. A victim of fraud is an individual designated as such by the Secretary of the Treasury based on an application with documentation from a law enforcement agency or court of competent jurisdiction establishing the individual was a victim of a fraudulent act resulting in the distribution; the distributed amount may be repaid under rules similar to those for certain other penalty-free distributions. The provision applies to distributions made after the date of enactment.
This section directs the Secretary of the Treasury (or the Secretary's delegate) (1) not later than 180 days after enactment, to issue guidance on the process for claiming the waiver of early withdrawal penalties for victims of fraud under new IRC §72(t)(2)(N); and (2) as soon as practicable after enactment, to conduct a public awareness campaign to educate the public about such protections and relief.