Search Results
Wednesday, February 10th, 2010
You know you’ve gotten yourself in deep trouble when Wikipedia, the wildly popular online encyclopedia, has an article about you titled “Spinka Financial Controversy“. What can I say? Tax evasion and tax fraud, on a small scale or grand scale, is wrong and the IRS will catch you. For those of you who are victims of fraudulent investment schemes, there is some hope for recovery. Under the Internal Revenue Code 165 you may be able to recoup 30% to 40% of your losses. If you’ve been a victim of an investment fraud, seeing the perpetrators go to jail is only one half of revenge – recouping your losses is the other!
The Grand Rabbi of Spinka, a religious group within Orthodox Judaism, was sentenced to two years in federal prison for orchestrating a tax evasion scheme that prosecutors called “an astonishingly complex and sinister enterprise.”
Grand Rabbi Naftali Tzi Weisz, 61, of Brooklyn, New York, pleaded guilty last summer to a criminal conspiracy charge in which he admitted to working with others to obstruct the IRS by soliciting charitable donations to Spinka-related organizations with secret promises to refund donors the vast majority of the money they “donated.”
With Weisz’s sentencing, a total of seven individuals have been convicted and sentenced for working together to obstruct the IRS and to operate an unlicensed money-transmitting business.
Tax Resolution Services offers Investment Fraud Representation amongst our list of tax services. We are Certified Tax Resolution Specialists and can help with recovering your investment fraud losses today! Free tax consultation with a tax specialist simply by filling out this short online form.
Tags: , certified tax resolution specialists, evading taxes, internal revenue code 165, investment fraud representation, investment scheme representation, investment scheme victim, investment schemes, money laundering, obstructing the IRS, pozni scheme, recover investment fraud losses, section 165 representation, tax evasion, tax fraud, tax resolution services, wikipedia
Posted in IRS Tax Cases, IRS Times and Inquirer, Seeking Professional Tax Help | No Comments »
Saturday, January 23rd, 2010
On this tax blog I have written about tax scams and tax evasion many times. Besides Bernie Madoff and his Ponzi scheme, I have never written about a story as ridiculous as this one. First of all, selling stolen software is dumb. Even dumber when you steal it directly from Dell, one the biggest computer corporations, and then commit tax evasion to hide your earnings from this stolen property. This man was just begging to be caught! How does this tie into Tax Resolution Services? First of all, if you’re selling stolen software and falsely reporting earnings on your tax return, we can’t help you. But if you are struggling to resolve tax problems such as back taxes owed, are wondering about IRS payment plans or payroll tax problems, we can gladly help you! Hire our team of tax attorneys, CPAs and Certified Tax Resolution Specialists today to settle your tax problems by calling 1-866-IRS-PROBLEMS!
A Delaware pleaded guilty to one count of mail fraud and three counts of tax evasion in an elaborate scheme to defraud computer maker Dell.
According to court records, between 2005 and 2008, Ning Zhu, 32, of Newark, Del., defrauded Dell of approximately $102,000 by fraudulently obtaining software in connection with the purchase of personal computers.
During the course of hundreds of transactions with Dell, Zhu, using multiple false names and addresses, claimed not to have received software that he had in fact received. Through this deception, Zhu obtained duplicate copies of the software, which he then sold unlawfully.
On his tax returns, Zhu falsely stated that his income for 2005 was $4,603, and that the amount of tax due was $0. In fact, his taxable income for 2005 was $300,333, and the amount of tax due was $79,701. He made similarly false statements in 2006 and 2007, grossly underreporting his income from the sale of the ill-gotten software.
On the mail fraud charge, Zhu faces a maximum up to 20 years in prison and a $250,000 fine. On each of the three tax evasion charges, he faces up to five years in prison and a $250,000 fine.
Tax Resolution Services is a company that provides tax relief services. Take the first step to tax resolution by filling out our online form for a free tax consultation. Visit our tax blog daily for free tax advice.
Tags: certified tax resolution specialist, dell software scam, filing false tax returns, free tax advice, Free Tax Consultation, IRS Payment Plans, irs problems, mail fraud, resolve tax problems, settle tax problems, tax attorneys, tax blog, tax CPA, tax evasion, Tax Payment Plans, tax resolution, tax resolution services
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
Monday, January 11th, 2010
Investment fraud, also known as a “Ponzi” scheme, is prevelant both on a small scale or large scale (two words: Bernie Madoff). Tax Resolution Services offers help for those who’ve been scammed in these white collar crimes. A Certified Tax Resolution Specialist can tell you if you are eligible to recover 30% to 40% of your losses through investment fraud representation under the Internal Revenue Code section 165. Recoup your losses with professional investment fraud representation and enjoy the article about this white collar criminal that was caught!
A former Broward County, Fla., commissioner and county mayor pleaded guilty in December to conspiring to launder money and to filing a false tax return.
During the plea hearing, Josephus “Joe” Eggelletion, 60, of Lauderdale Lakes, Fla., admitted to intentionally conspiring with others to assist in the laundering of money represented by FBI undercover agents as coming from a purported high-yield investment “Ponzi” scheme and to evade paying federal income taxes on the cash fees he received for laundering this money.
More specifically, Eggelletion admitted that he introduced the FBI undercover agents to co-conspirators Ronald Owens and Joel Williams, who assisted the undercover agents in meeting with Bahamian attorney Sidney Cambridge to open a Bahamian bank account to launder their money. The undercover agents had represented to Eggelletion and others that the money originated from a high-yield investment fraud scheme.
Eggelletion faces up to five years in prison.
Tax Resolution Services offers a free consultation for investment fraud representation and tax problems such as filing delinquent tax returns, dealing with IRS tax liens or tax audits and more. Call 1-866-IRS-PROBLEMS to speak with a tax professional today!
Tags: Bernie Madoff, certified tax resolution specialist, evade paying federal taxes, filing delinquent tax returns, filing false tax return, Free Tax Consultation, internal revenue code 165, investment fraud representation, investment fraud scheme, IRS 165 code, money laundering and tax evasion, overseas tax shelters, ponzi scheme, section 165, section 165 representation, tax evasion, tax liens, tax resolution services, tax resolution specilist, white collar crimes
Posted in Expert Help From Tax Attorney, IRS Tax Cases, IRS Times and Inquirer, Tax Liens and Levies | No Comments »
Thursday, November 5th, 2009
On Tuesday Madoff’s long-time accountant, David G. Friehling, pleaded guilty in the criminal investigation of the 20-year “Ponzi Scheme” that lost investors a total of $21.1 billion in cash.
According to the New York Times, “Mr. Friehling also pleaded guilty to three counts of obstructing the administration of the federal tax laws – charges added within the last five days to the government’s original complaint.”
This recent development shines light that may lead the investigation away from securities fraud and into the realm of criminal tax cases. With Mr. Friehling’s cooperation, it is highly likely that the investigation will strive to build criminal tax cases against other members of the Madoff drama.
Though Friehling has been working closely with Madoff and personally had investments in the scheme, he denies any knowledge of Madoff’s “Ponzi Scheme”–claiming that he “trusted Madoff’s numbers and took the numbers given to him to plug into his independent audits.”
The New York Times reports that “in essence, Friehling admitted that he had never adequately audited the Madoff operation and, as an investor in the scheme, had never been a truly independent auditor. Nevertheless, he produced the supposedly professional and independent audits that sustained the Madoff fraud year in and year out.”
Besides three tax charges, Friehling pleaded guilty to one count each of securities fraud and investment adviser fraud and four counts of making false filings to the Securities and Exchange Commission. He also pleaded guilty to nine criminal charges back in December when the “Ponzi Scheme” collapsed which gives him up to 114 years in prison.
If you or someone you know have been affected by the Madoff scandal, you can claim some tax relief on the investments you lost. Tax Resolution Services helps people to recoup their investment losses through the IRS tax code.
Most victims of these “Ponzi Schemes” can convert their capital stock losses into “ordinary” losses and offset them against prior, current and future ordinary taxable income, thereby reducing the taxes paid in those years, and receiving a refund with interest. Learn more about how you can recover your investment losses.
Don’t let the “Ponzi Scheme” ruin your life. Reclaim a portion of your losses with professional tax help. Contact our team of experts for a free consultation. Call us at 866-IRS-PROBLEMS (1-866-477-7762) or visit our website at www.TaxResolution.com
Tags: David G. Friehling pleads guilty, IRS debt, Madoff scandal, Michael Rozbruch, ponzi scheme, recoup investment losses, tax attorney, tax expert, tax help, tax relief
Posted in Seeking Professional Tax Help, Tax news and tips | No Comments »
Friday, October 16th, 2009
As a certified tax resolution specialist, I help individuals and businesses get the tax help they need to solve their tax problems. I even get questions from other CPAs and tax professionals (like the one below) seeking expert tax resolution advice. If you have a question, please call our office at 1-866-IRS-PROBLEMS or visit www.taxresolution.com
————–
Question: I have been involved in the preparation of form 1045 carry back claims that go back five, four, and three years. In many instances, the carry back eliminated the tax liability for the parents in 2003 and 2004. These taxpayers often have children who were subject to the kiddie tax based upon their tax rates. However, 2003 and 2004 are closed years.—Matthew H. Pennsylvania
I have inquired to the Office of Chief Counsel as to if any relief would be available for this situation and it does not appear that anything is imminent. Just wondering if your firm has considered this issue and if there is any groundswell to get relief.
Answer: Hi Matthew, our team of tax resolution experts at Tax Resolution Services have not yet encountered this issue you describe in connection with any of our 1045 carry back scenarios. However, if we hear of any updates on this matter in terms of tax relief, we will be sure to update the information on our blog. Learn more about the kiddie tax.
—————-
We have several Bernie Madoff cases that we’re working on in house. It’s important for victims of investment fraud to know that they can recoup some of their losses through IRS tax codes. You will need expert tax help amending your tax returns and carrying back losses to previous years. It’s a complicated and technical process – but it could help taxpayers who’ve gotten caught up in Ponzi schemes recoup 30-40% of your losses.
For more advice or information on investment fraud recovery, you can call us at 866-IRS-PROBLEMS (866-477-7762) for a FREE consultation and we can discuss the case in more detail.
Tags: 1045, Bernie Madoff, investment fraud, IRS help, IRS problem solver, kiddie tax, Michael Rozbruch, ponzhi schemes, tax expert, tax relief
Posted in Ask the Expert | 1 Comment »
Thursday, August 6th, 2009
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.
I’ve blogged about how 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.
Our tax resolution firm is handling several Madoff-related cases. 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.
If you’re a victim of investment fraud, you need the help of a highly specialized tax attorney and/or tax resolution professional. Visit the Tax Resolution Services web site for a free tax relief consultation or call us at 866-IRS-PROBLEMS.
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.
Tags: Bernard Madoff, investment fraud, investment fraud recovery, investment fraud representation, IRS refunds, Madoff Victims, Michael Rozbruch, ponzi victims, tax attorney, tax break for madoff victims, theft loss deductions
Posted in IRS Tax Cases, Tax Resolution Options and Alternatives, Tax news and tips, Working with the IRS | 1 Comment »
Friday, July 24th, 2009
Many people are skeptical about hiring professional tax attorneys to help resolve their IRS tax problems–some are concerned about saving service fees and others are downright skeptical about their chances of winning.
There has been a lot of misinformation going around about tax resolution scams. There have been stories of official looking IRS snail mail or email that not only steal your identity but also tricks some victims into writing big checks to the “tax resolution firm.” Naturally, horror stories like this will breed a defensive level of skepticism towards tax resolution attorneys. However, going against the IRS without a tax lawyer is like riding buck naked in a motocross race, you probably won’t win and if you crash, the results could be fatal.
You can ensure the professional quality of your tax representation by doing your research. If you proactively seek out as much information as you can on a tax attorney (success rate, areas of expertise, professional record…etc.), you will be much more confident in your decisions. Learn how you can pick the best tax attorney for you.
As a tax resolution specialist for the past 10+ years, I have my obvious bias. At TRS, we are a team of highly specialized tax resolution experts including tax attorneys, CPAs, EAs (enrolled agent tax experts) and others who have been providing income tax help for a combined 150 years of experience. We have helped provide IRS tax relief for people who have tax problems with back taxes, late filing, tax fraud, theft (from Madoff and other Ponzi schemes) and more. We have seen the substantial tax relief success our team can bring. We’ve also seen the disasters that strike those who dare to go solo.
Contact our specialized staff of tax attorneys, CPAs, EAs and tax professionals. Visit the Tax Resolution Services web site for a free tax relief consultation or call us at 866-IRS-PROBLEMS.
Tags: IRS audits, IRS debt, IRS help, IRS problem solver, Michael Rozbruch, tax advice, tax attorney, tax audit, tax audits, tax lawyer, tax resolution services, Tax Tips
Posted in Seeking Professional Tax Help, Taxpayer Rights | No Comments »
Monday, June 29th, 2009
Bernard Madoff was sentenced to 150 years in prison today. According to MSNBC, the disgraced investor received the maximum sentence for his massive Ponzi scheme and apologized to victims for the multibillion-dollar fraud scheme that the judge called “extraordinarily evil.” An investigation has found that in reality, Madoff never made any investments, instead using the money from new investors to pay returns to existing clients — and to finance a lavish lifestyle for his family.
Victims of the $50 billion scam include banking institutions, various charities and a long list of celebrities including Steven Spielberg. While it’s one of the biggest Ponzi schemes in the history of Wall Street, many people may not be aware that victims of investment fraud can take advantage of tax benefits that can help them recover their financial losses.
I handle IRS cases for victims of investment fraud – including those scammed by Madoff’s Ponzi scheme. Taxpayers can recover 30-40% of their losses by filing tax theft loss deductions. To qualify for this IRS tax break, fraud victims but will need to go back and amend their tax returns to recoup their losses. And although the IRS has released Safe Harbor Guidelines to help taxpayers recoup their financial losses, they will still need a specialized investment fraud help to successfully navigate the complicated and highly technical tax code.
**For more advice and information on investment fraud representation, visit the Tax Resolution Services web site for a free tax relief consultation or call 866-IRS-PROBLEMS.
Tags: Bernard Madoff, Bernie Madoff, investment fraud help, investment fraud representation, irs problems, IRS safe harbor guidelines, Michael Rozbruch, ponzi scheme, tax attorney, tax expert, tax help, tax resolution services, theft loss deductions
Posted in Tax news and tips, Working with the IRS | No Comments »
Wednesday, April 29th, 2009
Danny Pang, and Orange County money manager, was arrested on suspicion of evading currency reporting laws. According to the Los Angeles Times, Pang is accused of bilking investors of hundreds of millions of dollars and has allegedly sought to hide more than $300,000 in cash from the government.
On Monday, Pang’s assets and those of his Irvine company, Private Equity Management Group Inc., were frozen at the request of the SEC. He was asked to surrender his passports, return any “ill-gotten gains” and any money that might have been sent overseas.
The SEC said in a complaint that Pang had used money from newer investors to make interest payments to earlier investors, a tactic often used in Ponzi schemes.
I’ve helped victims of investment fraud – including those scammed by Madoff’s Ponzi scheme - recoup 30-40% of their losses from the IRS. By filing tax theft loss deductions, fraud victims can qualify for an IRS tax break to recover taxes paid on phantom income — profits that appeared on their annual account statements but didn’t actually exist and were never paid to the investor — from the last five years.
The IRS has released Safe Harbor Guidelines for helping taxpayers recoup fraud losses, but I recommend that fraud victims get a specialized tax expert to navigate the tax code and assist them through the highly complicated and technical process.
For more advice and information on investment fraud representation, visit the Tax Resolution Services web site for a free tax relief consultation or call 866-IRS-PROBLEMS.
Tags: danny pang, investment fraud, investment fraud representation, Offer in Compromise, orange county tax resolution, ponzi scheme, safe harbor guidelines, tax evasion, tax expert, tax help, tax resolution, tax resolution expert, tax resolution services, theft loss deductions
Posted in Tax news and tips | No Comments »
Monday, April 27th, 2009
I’ve blogged before about the investment fraud loss and deductibility rules outlined in Internal Revenue Code 165, and how the tax code can help victims of investment fraud recoup their losses. Now Madoff victims are hoping to get refunds on past state taxes paid on income from Madoff that they might never have received.
The Los Angeles Times reports that hundreds of Californians, many of them elderly and nearly broke, are pressing legislators for help in getting compensation for some of the money they lost in a Ponzi scheme run by confessed swindler Bernard Madoff.
Madoff pleaded guilty in March to 11 securities-related fraud counts. He is in jail awaiting a June 16 sentencing hearing.
Now, more than 400 of his victims who live in California are seeking passage of a bill that would give them the right to get back tax payments on so-called phantom income — profits that appeared on their annual account statements but didn’t actually exist and were never paid to the investor — from the last five years. The group represents about a tenth of all victims nationwide of the $65-billion fraud.
Such refunds on amended prior tax returns currently are allowed by the U.S. Internal Revenue Service but not by the California Franchise Tax Board, which collects state income taxes.
The state is refusing to make its income tax rules conform with federal law. Some of the Madoff victims who lost millions of dollars in the investment scam feel like this is inherently unfair and that they are being victimized a second time by the state of California.
I handle IRS cases for victims of investment fraud – especially those scammed by Madoff’s Ponzi scheme – who a are looking to recover 30-40% of their losses by filing tax theft loss deductions. Fraud victims qualify for this IRS tax break, but will need to go back and amend their tax returns to recoup their losses. Even though the IRS has released Safe Harbor Guidelines for recouping their fraud losses, taxpayers will still need a specialized tax expert to help them navigate the tax code and assist them through this process.
**For more advice and information on investment fraud representation, visit the Tax Resolution Services web site for a free tax relief consultation or call 866-477-7762.
Tags: Bernard Madoff, Bernie Madoff, california tax refunds, investment fraud victims, los angeles times, Michael Rozbruch, ponzi scheme, safe harbor guidelines, tax expert, tax resolution, tax resolution services, theft loss deductions
Posted in Tax news and tips | No Comments »
Wednesday, April 22nd, 2009
A San Antonio, Texas, woman was sentenced to 41 months in federal prison and ordered to pay $1.5 million in restitution to the IRS for her role in a fraudulent tax scheme.
In addition to the prison term, United States District Judge Fred Biery ordered that Terrell Diamond be placed under supervised release for a period of three years after completing her prison term.
According to court records, Diamond, along with her now-ex-husband and co-defendant, William Diamond, conspired to defraud the IRS in the assessment and collection of more than $1.5 million in employment taxes due and owing from November 1996 to June 2003.
The employment taxes owed pertained to temporary employment agencies owned and operated by the Diamonds, including Ameriforce and Primo Labor.
On April 24, 2008, Diamond pleaded guilty to one count of conspiracy to defraud the IRS. William Diamond pleaded guilty to the same charge on February 29, 2008. William, who faces up to five years in federal prison, is scheduled to be sentenced in May.
Tax conspiracies are happening on small and large scales. I’ve blogged about the Ponzi Scheme – a large scale tax conspiracy. Don’t get caught up in tax problems! Tax Resolution Services is the leading tax negotiation and mediation firm – call us at 1-866-IRS-PROBLEMS for a free tax consultation.
Tags: conspiracy to defraud IRS, fraudulent tax scheme, ponzi scheme, San Antonio fraudulent tax scheme, Tax Conspiracy, tax fraud
Posted in IRS Tax Cases, IRS Times and Inquirer | No Comments »
Tuesday, March 24th, 2009
I recently blogged about the new IRS Safe Harbor guidelines for Ponzi scheme victims.
CCH has issued a white paper addressing the various tax and planning implications that arise as a result of investment in the Madoff Ponzi scheme or other fraudulent schemes. The paper, Madoff and Other Fraudulent Schemes: Tax and Planning Implications, analyzes the tax issues and bankruptcy implications arising from the schemes and provides an overview of related IRS guidance, including items released during the week of March 16. The authors expect to update the paper on an ongoing basis as further guidance is released.
**For more advice and information on investment fraud representation, visit the Tax Resolution Services web site for a free tax relief consultation or call 866-477-7762.
Tags: Bernie Madoff, investment fraud, investment fraud representation, IRS safe harbor, Michael Rozbruch, ponzi scheme, ponzi victims, tax attorney, tax expert, tax help, tax plaaning, tax relief, tax resolution, tax resolution expert, tax resolution services, Tax Tips
Posted in Tax news and tips | 3 Comments »
Friday, March 20th, 2009
Under the NEW IRC Section 165 Safe Harbor Rules the IRS estimates it will refund victims of the Bernard Madoff’s massive ponzi scheme around $17 billion!!
The Safe Harbor provisions are crucial to obtaining relief for victims of investment stock fraud because it converts what would ordinarily be a capital loss (which is offset against capital gains and any unused capital loss is then limited to a deduction of only $3,000 a year indefinitely) into an ordinary loss allowing the victim to offset ordinary income (such as W-2 and self-employment income, as some examples) in the year of discovery.
What Safe Harbor Really Means for Ponzi Victims
Safe Harbor makes it easier for victims to obtain a relief, but they will still need a specialized tax expert to prepare such returns and even more importantly -to represent them when the IRS challenges these returns (and the IRS will!). So when taxpayers are audited after following the safe harbor guidelines, they will need someone knowledgeable, assertive and aggressive in their corner to do battle with the IRS.
Investment gains and losses are always generally considered to be “capital” not “ordinary” which is a word in IRS lingo that describes non-passive income. If presented a choice, one would always chose to have a loss considered “ordinary” vs. “capital” as it can be used to offset ordinary (non-passive) income.
Remember: The IRS is not in the business of giving away money!
I am not surprised that the IRS has gone public with its “safe harbor” procedures for fraud victims. However, I would be surprised if the IRS actually follows through on their statements. I think we will see these returns being audited (challenged) left and right, as the IRS is not in the business of giving away money, as especially to the tune of $17 billion! It is not unusual at all for the IRS to do one thing while stating another. I see it happening every day of the week in my practice.
**For more advice and information on investment fraud representation, visit the Tax Resolution Services web site for a free tax relief consultation or call 866-477-7762.
Tags: Bernard Madoff, Bernie Madoff, capital loss, fraud loss, fraud loss deduction, investment fraud recovery, investment fraud representation, investment fraud victims, IRC 165, IRS audit, IRS audits, IRS problem solver, IRS safe harbor, IRS tax audit, Michael Rozbruch, ordinary loss, ponzi scheme, ponzi victims, tax attorney, tax audit, tax expert, tax help, tax relief, tax resolution, tax resolution expert, tax resolution services, tax settlement, Tax Tips
Posted in Tax news and tips, Working with the IRS | 3 Comments »
Thursday, March 19th, 2009
While Benrie Madoff was jailed last week after pleading guilty to charges surrounding his $65 billion Ponzi scheme, the IRS is busy issuing new guidelines for filing tax theft loss deductions.
Internal Revenue Service Commissioner Doug Shulman reached out to thousands of Ponzi victims to provide “safe harbor” procedures for taxpayers who sustained investment losses discovered to be criminally fraudulent.
In addition to simplifying and clarifying the filing process for those seeking refunds on taxes paid on “fictitious income,” the safe harbor provides relief for victims who complained they would have to wait years for liquidation and litigation to end before they could calculate the amount of their losses and get relief on their taxes.
The good news for Ponzi victims is that by using the safe harbor, they can declare a theft loss on 2008 tax returns (the year the fraud was discovered) for 95 percent of the amount they invested with Madoff. This is in addition to any “earnings” they left under his control, minus any withdrawals and amounts that have a reasonable prospect of recovery (including monies recovered through filing claims with the Securities Investor Protection Corp., which can be up to $500,000).
For victims suing an investment adviser, the safe harbor is reduced to 75 percent, while those not suing will be able to recover 95 percent. Either way, the full loss may be deducted when disputes are ultimately resolved.
And to complicate things just a little more, victims who are part of partnerships, or small businesses, will be able to go back 5 years to recover investments and phantom monies. Previously, it appeared victims could only go back three years. With this new ruling, a theft loss deduction that creates a net operating loss for the taxpayer can be carried back five years and forward 20 years to generate a refund of taxes paid in other taxable years.
Here’s a hypothetical scenario that might help illuminate the procedure (published on Time.com).
A Madoff victim with a balance of $1.5 million, but who withdrew $500,000 over the life of the account, would multiply the resulting $1 million by 95% (provided they are not suing Madoff) to yield their NOL, or a “net operating loss” of $950,000. The NOL would then be reduced further by whatever claims recovered from SIPC. If, for example, a victim were to receive from SIPC $200,000, that victim’s net operating loss would be $750,000, which would be the number used on tax returns to go back five years and forward 20 years from 2008 to recover monies against taxes paid.
**For more advice and information on investment fraud representation, visit the Tax Resolution Services web site for a free tax relief consultation or call 866-477-7762.
Tags: Bernie Madoff, doug shulman, fraud recovery, investment fraud, investment fraud recovery, investment fraud representation, investment loss deductions, IRS help, irs problems, IRS section 165, Michael Rozbruch, ponzi scheme, safe harbor, tax expert, tax help, tax relief, tax resolution, tax resolution expert, tax resolution services, tax returns, Tax Tips, theft loss deductions
Posted in Tax news and tips, Working with the IRS | 2 Comments »
Tuesday, March 10th, 2009
Shirley G. Graybill, 72, of North Haven, Conn., was sentenced to two years of probation — the first four months of which she must spend in home confinement — after pleading guilty to one count of making and subscribing to a false 2002 tax return.
According to court records, the Triple Diamond Foundation was an entity created by Graybill and her husband, Dale L. Graybill, purportedly to fund cancer research — but which did not have tax-exempt status from the IRS. The Graybills controlled the Triple Diamond Foundation and its bank account. During the 2002 tax year, the Graybills transferred about $350,000 from the Triple Diamond Foundation account, used those funds as income, and failed to pay about $93,293 in federal taxes.
On October 13, 2003, Graybill filed a tax return with the IRS in which she failed to claim her actual taxable income, which was approximately $316,519.79.
The Graybills also must pay $93,293 to the Internal Revenue Service. In addition, Dale Graybill was sentenced to 48 months in prison following his conviction on one count of mail fraud stemming from his operation of a multimillion-dollar Ponzi scheme in which he solicited investments for fictitious investment programs.
Tags: failing to pay federal taxes, failure to pay taxes, filing false tax return, Ponzi, ponzi scheme, tax cheat, tax evasion
Posted in IRS Tax Cases, IRS Times and Inquirer | 1 Comment »
