I
107TH CONGRESS
2D SESSION
H. R. 3713
To amend the Internal Revenue Code of 1986 to allow penalty-free
withdrawals from individual retirement plans for adoption expenses.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 8, 2002
Mr. KING (for himself, Mr. OBERSTAR, Ms. PRYCE of Ohio, Mr. GORDON, Mr.
DEMINT, Ms. NORTON, Mr. BACHUS, Ms. BROWN of Florida, Mr. BE-
REUTER, Mrs. KELLY, Mr. HALL of Ohio, Mr. SAXTON, Mr. FLETCHER,
Mr. BURTON of Indiana, Mrs. MCCARTHY of New York, Mr. GOOD-
LATTE, Mr. WILSON of South Carolina, Mr. SCHAFFER, Mr. OTTER, Mrs.
MORELLA, Mr. TIAHRT, Mr. GILMAN, Mr. GRUCCI, Mr. HOBSON, Mr.
RYUN of Kansas, Mr. MCHUGH, Mr. WOLF, Mr. CRAMER, Mr. SMITH of
New Jersey, Mr. HORN, Mr. COSTELLO, Mr. STRICKLAND, and Mr.
SOUDER) introduced the following bill; which was referred to the Com-
mittee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to allow pen-
alty-free withdrawals from individual retirement plans
for adoption expenses.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Dave Thomas Adop-
tion Act of 2002’’.
SEC. 2. PENALTY-FREE WITHDRAWALS FROM INDIVIDUAL
RETIREMENT 
PLANS 
FOR 
ADOPTION 
EX-
PENSES.
(a) IN GENERAL.—Paragraph (2) of section 72(t) of
the Internal Revenue Code of 1986 is amended by adding
at the end the following new subparagraph:
‘‘(G) QUALIFIED ADOPTION EXPENSES.—
‘‘(i) IN GENERAL.—Distributions from
an individual retirement plan to the extent
that the amount of such distributions does
not exceed the lesser of—
‘‘(I) $10,000 for the taxable year
with respect to the adoption of a
child, or
‘‘(II) the amount determined
under clause (ii).
‘‘(ii) DETERMINATION OF EXPENSES
NOT COVERED BY CREDIT.—The amount
determined under this clause is the excess
(if any) of—
‘‘(I) the qualified adoption ex-
penses (as defined in section 23(d))
paid by the taxpayer during the tax-
able year with respect to the adoption
of such child, over
‘‘(II) the amount of the credit al-
lowable under section 23 for such ex-
penses (determined as if such credit
were allowed for such year without re-
gard to any limitation based on liabil-
ity for tax).
‘‘(iii) SPECIAL
RULES
FOR
CHILD
WITH SPECIAL NEEDS.—In the case of an
adoption of a child with special needs (as
defined in section 23(d)(3))—
‘‘(I) subclauses (I) and (II) of
clause (i) shall not apply, and
‘‘(II) a distribution during the
applicable period from an individual
retirement plan with respect to such
adoption shall not be taken into ac-
count under this subparagraph to the
extent that such distribution, when
added to all other distributions with
respect to such adoption from indi-
vidual retirement plans for the appli-
cable period, exceeds $10,000.
For purposes of subclause (II), the term
‘applicable period’ means the 3-taxable
year period beginning with the taxable year
in which such adoption becomes final.
‘‘(iv) ORDERING RULE.—Distributions
shall not be taken into account under
clause (i) if such distributions are de-
scribed in subparagraph (A), (C), (D), (E),
or (F) or to the extent paragraph (1) does
not apply to such distributions by reason
of subparagraph (B).’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to distributions after the date of
the enactment of this Act.
Æ