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119-hr-2163119th CongressWALLET

No Penalties for Victims of Fraud Act

Sponsored By: Representative Stevens, Haley M. [D-MI-11]

Introduced

Summary

Waives the early withdrawal penalty for retirement distributions made because an individual is a victim of fraud. The bill would add a new exception to the tax code that defines a "victim of fraud" through an application, a Treasury designation, and law‑enforcement or court documentation, and it would allow repayment under rules like existing subparagraph H(v).

Show full summary
  • Victims of fraud: Individuals who can document a fraudulent act to a law enforcement agency or court and who are designated by the Secretary could take distributions from eligible retirement plans without the early‑withdrawal penalty, subject to the bill's application process and rules.
  • Federal administration: The Secretary of the Treasury must issue guidance within 180 days on how to claim the waiver and run a public awareness campaign to inform people about the relief.

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 2 benefits, 0 costs, 0 mixed.

No penalty for fraud-hit retirement withdrawals

If enacted, you could ask Treasury to waive the early withdrawal penalty if you took money out because you were a fraud victim. To qualify, you would apply in the time and way Treasury sets and include law‑enforcement or court documents showing the fraud. Treasury would need to designate you as a victim. It would cover eligible retirement accounts other than defined benefit pensions. It would apply only to withdrawals made after enactment, and you could repay the amount under similar repayment rules.

Treasury rules and outreach on penalty waivers

If enacted, Treasury would issue rules within 180 days explaining how to claim the penalty waiver and what documents to file. Treasury would also run a public awareness campaign as soon as practicable to inform people and advisers about the relief. The bill does not set a budget or methods for the campaign. This could help eligible victims file correctly and on time.

Sponsors & CoSponsors

Sponsor

Stevens, Haley M. [D-MI-11]

MI • D

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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