Before It's Too Late: Reconsidering The IRS Relief for Madoff Losses
02.20.2012
Tax Notes
Excerpt taken from the article.
In this article, [Caplin & Drysdale's Richard W. Skillman] analyzes the tax treatment of previously reported phantom income from a Ponzi scheme and concludes that the IRS had no legal basis to deny the applicability of section 1341. Accordingly, he recommends that Madoff investors and other Ponzi victims who have claimed safe harbor theft loss deductions under Rev. Proc. 2009-20 consider whether to relinquish those deductions when section 1341 combined with reduced theft loss deductions would provide greater tax relief, even if in a later tax year.
Click on the above PDF to read Before It's Too Late: Reconsidering The IRS Relief for Madoff Losses.
In this article, [Caplin & Drysdale's Richard W. Skillman] analyzes the tax treatment of previously reported phantom income from a Ponzi scheme and concludes that the IRS had no legal basis to deny the applicability of section 1341. Accordingly, he recommends that Madoff investors and other Ponzi victims who have claimed safe harbor theft loss deductions under Rev. Proc. 2009-20 consider whether to relinquish those deductions when section 1341 combined with reduced theft loss deductions would provide greater tax relief, even if in a later tax year.
Click on the above PDF to read Before It's Too Late: Reconsidering The IRS Relief for Madoff Losses.
