[Congressional Record Volume 171, Number 112 (Saturday, June 28, 2025)]
[Senate]
[Pages S4002-S4003]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 2528. Mr. GRASSLEY submitted an amendment intended to be proposed 
to amendment SA 2360 proposed by Mr. Thune (for Mr. Graham) to the bill 
H.R. 1, to provide for reconciliation pursuant to title II of H. Con. 
Res. 14; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. _____. ALLOWANCE OF CASUALTY LOSS DEDUCTION FOR CERTAIN 
                   LOSSES RELATED TO RETIREMENT ACCOUNT THEFT.

       (a) In General.--Section 165(h)(5)(A), as amended by this 
     Act, is further amended--
       (1) by striking ``attributable to a Federally declared 
     disaster'' and inserting ``attributable to--
       ``(i) a Federally declared disaster'',
       (2) by striking the period at the end and inserting ``, 
     or'', and
       (3) by adding at the end the following new clause:
       ``(ii) theft in connection with a qualified theft-related 
     retirement distribution.''.
       (b) Exception Related to Personal Casualty Gains.--Section 
     165(h)(5)(B), as amended by this Act, is further amended by 
     striking ``(as so defined) or a State declared disaster'' in 
     clause (i) and inserting ``(as so defined), a State declared 
     disaster, or a theft described in subparagraph (A)(ii),''.
       (c) Qualified Theft-related Retirement Distribution.--
     Section 165(h) is amended by adding at the end the following 
     new paragraph:
       ``(6) Rules relating to qualified theft-related retirement 
     distribution.--For purposes of this section--
       ``(A) In general.--The term `qualified theft-related 
     retirement distribution' means any distribution from an 
     eligible retirement plan (as defined in section 
     402(c)(8)(B))--
       ``(i) which is induced by fraud or deceit, and
       ``(ii) the amounts distributed in which are lost due to 
     theft (within the meaning of subsection (c)(3)).
       ``(B) Substantiation requirement.--A distribution shall be 
     treated as a qualified theft-related retirement distribution 
     only if--
       ``(i) the theft is reported to a law enforcement agency 
     within 60 days of discovery of the theft, and
       ``(ii) the taxpayer provides substantiation of the theft 
     and that the theft was properly reported to a law enforcement 
     agency, including a police report and statement from the 
     plan, or other documentation as determined by the Secretary.
     The Secretary shall prescribe such regulations as may be 
     necessary or appropriate to carry out the purposes of this 
     subparagraph, including regulations that may provide that 
     some or all of the requirements of this subparagraph do not 
     apply in appropriate cases.
       ``(C) Loss allowed to extent of income inclusion.--The loss 
     taken into account with respect to a qualified theft-related 
     retirement distribution shall not exceed the amount included 
     in gross income as a result of the distribution under section 
     72, 402(a), 403(a), 403(b), 408(d), or 457(a).
       ``(D) Exemption from 10 percent rule.--Paragraph (2)(A) 
     shall not apply to loss or gain related to a qualified theft-
     related retirement distribution.

[[Page S4003]]

       ``(E) Year of deduction.--
       ``(i) In general.--Loss or gain related to a qualified 
     theft-related retirement distribution may be taken into 
     account either in the year of the income inclusion described 
     in subparagraph (C) or in the year of discovery of the theft 
     or fraud.
       ``(ii) Period of limitation for claims.--The period of 
     limitation under section 6511 shall be extended such that, 
     notwithstanding subsections (a) and (b) of section 6511--

       ``(I) any claim for credit or refund (and any assessment of 
     tax) attributable to a deduction under this section with 
     respect to a qualified theft-related retirement distribution 
     may be made within 3 years after the later of the date of the 
     income inclusion described in subparagraph (C) or the date of 
     the discovery of the theft or fraud, and
       ``(II) the limitation of subsection 6511(b)(2) shall not 
     apply to such claim.''.

       (d) Waiver of 10-percent Additional Tax on Early 
     Distributions.--Section 72(t)(2) is amended by adding at the 
     end the following new subparagraph:
       ``(O) Qualified theft-related retirement distributions.--
     Any qualified theft-related retirement distribution (as 
     defined in section 165(h)(6)).''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2017.
       (f) Claims Originating in Prior Years.--In the case of a 
     qualified theft-related retirement distribution occurring 
     before the date of the enactment of this Act, notwithstanding 
     section 165(h)(6)(D)(ii) of the Internal Revenue Code of 1986 
     (as added by this section), the period of limitation under 
     section 6511 of such Code shall not expire until the date 
     which is 3 years after such date of enactment.
                                 ______