H.R.2163 - No Penalties for Victims of Fraud Act (119th Congress)
Summary
H.R.2163, the "No Penalties for Victims of Fraud Act," amends the Internal Revenue Code of 1986 to waive early withdrawal penalties from retirement accounts for individuals who have been victims of fraud. The bill requires victims to apply for a waiver from the Secretary of the Treasury and provide documentation from law enforcement or a court establishing the fraudulent act. The Secretary of the Treasury is also directed to issue guidance and conduct a public awareness campaign regarding these provisions.
Expected Effects
This bill will allow victims of fraud to access their retirement funds without incurring the usual early withdrawal penalties, providing them with financial relief during a difficult time. It also mandates the government to inform the public about this new provision. This could lead to increased financial stability for fraud victims and greater awareness of available resources.
Potential Benefits
- Provides financial relief to victims of fraud by waiving early withdrawal penalties on retirement accounts.
- Establishes a clear process for victims to apply for a waiver, ensuring fair and consistent application of the law.
- Requires the Secretary of the Treasury to issue guidance, clarifying the process for claiming the waiver.
- Mandates a public awareness campaign to educate individuals about the protections and relief available.
- May reduce the financial hardship and stress associated with being a victim of fraud.
Potential Disadvantages
- May increase the risk of fraudulent claims, requiring careful oversight and verification processes.
- Could potentially strain the resources of the IRS and the Department of Treasury in processing waiver applications and conducting the public awareness campaign.
- The definition of "victim of fraud" relies on documentation from law enforcement or courts, potentially excluding some legitimate victims who lack such documentation.
- The process of applying for and receiving the waiver may be complex and time-consuming for some individuals.
- The long-term impact on retirement savings and financial security for individuals who withdraw funds early is a concern.
Constitutional Alignment
This bill aligns with the general welfare clause of the Constitution, as it aims to provide financial relief to victims of fraud, promoting their well-being. Congress has the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States, as outlined in Article I, Section 8. This bill falls under the power of Congress to make laws necessary and proper for carrying into execution the powers vested by the Constitution in the government of the United States.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).