Sec. 41104. INDIVIDUALS HELD HARMLESS ON IMPROPER LEVY ON RETIREMENT PLANS
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## SEC. 41104 INDIVIDUALS HELD HARMLESS ON IMPROPER LEVY ON RETIREMENT PLANS ###
(a)In General Section 6343 is amended by adding at the end the following new subsection: > > ### “(f) Individuals Held Harmless on Wrongful Levy, etc. on Retirement Plan > > > #### “(1) In general > > If the Secretary determines that an individual’s account or benefit under an eligible retirement plan (as defined in section 402(c)(8)(B)) has been levied upon in a case to which subsection
(b)or (d)(2)(A) applies and property or an amount of money is returned to the individual— > > > ##### “(A) > > the individual may contribute such property or an amount equal to the sum of— > > > ###### “(i) > > the amount of money so returned by the Secretary, and > > > ###### “(ii) > > interest paid under subsection
(c)on such amount of money, > > into such eligible retirement plan if such contribution is permitted by the plan, or into an individual retirement plan (other than an endowment contract) to which a rollover contribution of a distribution from such eligible retirement plan is permitted, but only if such contribution is made not later than the due date (not including extensions) for filing the return of tax for the taxable year in which such property or amount of money is returned, and > > > ##### “(B) > > the Secretary shall, at the time such property or amount of money is returned, notify such individual that a contribution described in subparagraph
(A)may be made. > > > #### “(2) Treatment as rollover > > The distribution on account of the levy and any contribution under paragraph
(1)with respect to the return of such distribution shall be treated for purposes of this title as if such distribution and contribution were described in section 402(c), 402A(c)(3), 403(a)(4), 403(b)(8), 408(d)(3), 408A(d)(3), or 457(e)(16), whichever is applicable; except that— > > > ##### “(A) > > the contribution shall be treated as having been made for the taxable year in which the distribution on account of the levy occurred, and the interest paid under subsection
(c)shall be treated as earnings within the plan after the contribution and shall not be included in gross income, and > > > ##### “(B) > > such contribution shall not be taken into account under section 408(d)(3)(B). > > > #### “(3) Refund, etc., of income tax on levy > > > ##### “(A) In general > > If any amount is includible in gross income for a taxable year by reason of a distribution on account of a levy referred to in paragraph
(1)and any portion of such amount is treated as a rollover contribution under paragraph (2), 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. > > > ##### “(B) Exception > > Subparagraph
(A)shall not apply to a rollover contribution under this subsection which is made from an eligible retirement plan which is not a Roth IRA or a designated Roth account (within the meaning of section 402A) to a Roth IRA or a designated Roth account under an eligible retirement plan. > > > #### “(4) Interest > > Notwithstanding subsection (d), interest shall be allowed under subsection
(c)in a case in which the Secretary makes a determination described in subsection (d)(2)(A) with respect to a levy upon an individual retirement plan. > > > #### “(5) Treatment of inherited accounts > > For purposes of paragraph (1)(A), section 408(d)(3)(C) shall be disregarded in determining whether an individual retirement plan is a plan to which a rollover contribution of a distribution from the plan levied upon is permitted.” > . ###
(b)Effective Date **[**[26 U.S.C. 6343 note](/us/usc/t26/s6343)**]** The amendment made by this section shall apply to amounts paid under subsections (b), (c), and (d)(2)(A) of section 6343 of the Internal Revenue Code of 1986 in taxable years beginning after December 31, 2017.
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Sec. 41104
INDIVIDUALS HELD HARMLESS ON IMPROPER LEVY ON RETIREMENT PLANS
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