The Internal Revenue Service has begun sending out refund checks to victims of Bernie Madoff’s scheme who’ve taken advantage of a special IRS rule for Ponzi victims. The IRS is now repaying investors who’ve paid taxes on money they thought they made on investments with Madoff’s firm.
Ponzi victims can get expert tax help for maximizing their tax benefits to help them regain their financial welfare. Taxpayers can recover 30-40% of their losses by filing tax theft loss deductions and filing amended tax returns to recover some of their financial losses. For instance, if you’ve lost $100,00 million in this scheme, you can recoup $30 to $40 million of that in taxes.
The only way for these folks who lost out and got caught up in investment fraud to get some of their money back is to get specialized investment fraud representation. Madoff victims will have to amend their tax returns - which is a complicated and technical process.
The IRS has also denied tax refunds in some cases. If you don’t get specialized tax help to assist you in recovering your investment fraud losses, you could be leaving money behind on the table.
The Wall Street Journal reports:
An early trickle of refunds includes checks for substantial amounts, nearly half a million dollars in some cases. The very biggest sums haven’t materialized, however, according to certified public accountants. By some estimates, these could be for tens of millions of dollars.
The Madoff-related tax refunds are arriving after a lot of uncertainty over how the IRS would handle returns filed by burned investors. Tax advisers clashed over how best to retrieve money for clients as the scandal emerged. Some urged people to file amended returns, while others counseled them to hold off.
In March the IRS set the stage for large refunds with a generous reading of rules that let investors take a theft loss on their 2008 tax returns.
Those suing third parties get less-generous treatment because they have a better prospect of recovering money.