Sec. 307. Rules related to levies on qualified retirement plans
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Section 6334 is amended— by redesignating subsections
(f)and
(g)as subsections
(g)and (h), respectively, by inserting after subsection
(e)the following new subsection: Amounts in a qualified retirement plan (as defined in section 4974(c)) or amounts in a taxpayer's account in the Thrift Savings Fund (as described in section 8439(a)(2) of title 5, United States Code) shall be exempt from levy unless— the amount of tax (excluding interest and penalties) owed by the taxpayer exceeds $10,000, the Secretary determines that the taxpayer has committed a flagrant act, and the Secretary determines that such levy will not create an economic hardship due to the financial condition of the taxpayer (as described in section 6343(a)(1)(D)). For purposes of this subsection, the term flagrant act means— the filing of a fraudulent return by the taxpayer, or that the taxpayer acted with the intent to evade or defeat any tax imposed by this title or the collection or payment thereof. , and in subsection (h), as redesignated by paragraph (1)— by redesignating paragraph
(2)as paragraph (3), in paragraph (3), as redesignated by subparagraph (A), by inserting or
(2)after paragraph
(1), and by inserting after paragraph
(1)the following new paragraph: In the case of any calendar year beginning after 2015, the dollar amount referred to in subsection (f)(1)(A) shall be increased by an amount equal to— $10,000, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, by substituting calendar year 2014 for calendar year 1992 in subparagraph
(B)thereof. . Section 6343 is amended by adding at the end the following new subsection: If the Secretary determines that a qualified retirement plan (as defined in section 4974(c)) or a taxpayer's account in the Thrift Savings Fund (as described in section 8439(a)(2) of title 5, United States Code) has been levied upon in a manner described in section 7433 or subsection
(b)or
(d)of this section, the applicable amount (as determined under paragraph (2)) may be deposited into— if permissible, the plan or account levied upon, or an individual retirement plan (other than an endowment contract) to which a rollover from the plan or account levied upon is permitted. For purposes of paragraph (1), the applicable amount is an amount equal to the sum of— the amount of money or damages returned by the Secretary on account of a levy described in paragraph (1), and any interest paid pursuant to subsection
(c)on such amount. For purposes of this title, the distribution on account of the levy and any deposit under paragraph
(1)with respect to such distribution shall be treated as if such distribution and deposit were a rollover contribution described in section 408(d)(3)(A)(i), except that— any interest paid pursuant to subsection
(c)shall be treated as a part of such distribution and not included in gross income, the 60-day requirement under such section shall be deemed to have been met if the deposit is made not later than the 60th day after the day on which the taxpayer receives an amount described in paragraph
(1)from the Secretary, and such deposit shall not be taken into account for purposes of section 408(d)(3)(B). If any amount is includible in gross income for a taxable year by reason of a levy described in paragraph
(1)and any portion of such amount is treated as a rollover pursuant to paragraph (3), any tax imposed by chapter 1 on such portion shall not be assessed, and if assessed shall be abated, and if collected shall be credited or refunded as an overpayment made on the due date for filing the return of tax for such taxable year. Notwithstanding subsection (d), interest shall be allowed under subsection
(c)in any case in which the Secretary makes a determination described under section 7433 or paragraph
(2)of subsection
(d)with respect to a levy upon a qualified retirement plan or an account in the Thrift Savings Fund. . The amendments made by this section shall apply to levies served after the date of the enactment of this Act.