S.Amdt. 2528

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.
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