Ponzi Victims Can Claim Losses On Tax Returns: IRS

Law360, New York (March 17, 2009, 12:00 AM EDT) -- The Internal Revenue Service issued new rules Tuesday that allow victims of Ponzi schemes similar to the one run by Bernard L. Madoff to recoup some of their money by reporting theft losses on their 2008 tax returns.

By claiming theft losses, victims of fraudulent investment schemes would be entitled to a much larger deduction than a normal capital loss deduction that is typically capped at $3,000 per year, IRS Commissioner Douglas Shulman testified at a U.S. Senate Finance Committee hearing.

“Beyond the toll in human...
To view the full article, register now.