I 
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 Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘No Penalties for Vic-
tims 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: 
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‘‘(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 pur-
poses of this subparagraph, the term ‘vic-
tim of fraud’ means an individual who— 
‘‘(I) submits an application for 
waiver to the Secretary (in such time 
and manner as the Secretary may pre-
scribe) which fulfils the documenta-
tion requirement of clause (iii), and 
‘‘(II) is designated as a victim of 
fraud by the Secretary. 
‘‘(iii) 
DOCUMENTATION
REQUIRE-
MENT.—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 
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act that resulted in a distribution from an 
applicable retirement plan. 
‘‘(iv) AMOUNT DISTRIBUTED MAY BE 
REPAID.—Rules similar to the rules of sub-
paragraph (H)(v) shall apply. 
‘‘(v) APPLICABLE ELIGIBLE RETIRE-
MENT PLAN.—The term ‘applicable eligible 
retirement plan’ means an eligible retire-
ment 
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) 
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shall conduct a public awareness campaign to educate the 
public about the protections and relief available under sec-
tion 72(t)(2)(N) of the Internal Revenue Code of 1986, 
as added by section 2 of this Act. 
Æ 
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