Deducting a Stolen Investment Fraud Ponzi Scheme Loss as Theft and Casualty Losses using IRS Income Tax Break Section 165
Stock Fraud Scam Ponzi Victim Theft Loss Tax Deduction, Recovery and Relief
Fraud victim impact testimony shows that while a stock scam or investment fraud victim may not ever see financial restitution to investors from the scammers through criminal disgorgement under the Victims of Crime Act or civil litigation, he or she may be entitled to what is referred to as a casualty or theft loss tax deduction which is for deducting a theft loss or an embezzlement loss deduction caused by broker misconduct while investing.
So let Uncle Sam take part of the hit for your loss. If the United States Government had used your tax money to protect investors from the prevalent scamming vultures in the first place your pain and misery might have been avoided altogether.
Face it, when it comes to investment fraud victims, there is no justice. You will never see your money again once the scammers have it.
Thinking that a lawyer will help you is almost like throwing good money after bad. The scammers have teams of professional attorneys on retainer for the sole purpose of keeping your money and keeping out of jail. Your lawyer will get eaten for lunch while racking up a high bill for you.
Despite all the talk of crime victim restitution, compensation and the Victim Restitution Act the scammers will have hidden your funds overseas and then claim to be bankrupt, despite living in luxury and being able to afford high-priced lawyers even if they are caught by the government authorities or regulatory commissions.
A victim of a stock scam, or investment adviser / broker securities fraud who is seeking an accelerated deduction for theft loss, or wants information or advice on the tax treatment of a devastating unrecoverable fraud loss or how to write off worthless stocks or bad investments caused by broker misconduct, should review tax benefit solutions in Section 165 of the income tax code then contact a theft deduction specialist.
Victims of white-collar crime telemarketing fraud should also consider theft deduction tax relief which gives injured consumers and defrauded customers an accelerated tax loss deduction when civil fraud loss recovery is not an option.
This tax recovery method of using deductible losses for a casualty or theft deduction may indirectly help in recovering fraud losses caused by stock scams, broker negligence, real estate schemes, criminal appropriation, telemarketer fraud, investment theft through a boiler room, Internet fraud, the loss of embezzled trust funds by a lawyer, financial adviser or bookkeeper, money which has disappeared within an insolvent financial institution or bankrupt business, all through the accelerated tax benefits of this qualified tax deduction.
The most common types of investment fraud which create losses high enough to warrant use of this tax reduction method for scam victims are Ponzi schemes, High Yield Investment Offshore Prime Bank frauds, Boiler Room Stock Scams, Commodity and Forex foreign currency operations, Viatical Insurance investment fraud, Abusive Offshore Tax Shelter Schemes, and Nigerian email scams which have progressed to a later stage of victimization and complexity.
It is also not uncommon for criminal fraud victims of confidence games such as psychic scams, identity theft and senior and elder abuse cases to lose substantial unrecoverable sums by false pretenses which may be considered for this form of deductible theft loss tax treatment.
So cut your financial losses, get the tax break processed by professionals, then get on with your life. Nothing is worth killing yourself for! Especially not some scum-sucking stock-scamming sociopath.
When stockbroker misconduct, misrepresentation, embezzlement, or broker negligence causes his clients or customers to be defrauded, the monetary losses of the financial fraud victim in the worthless investment may be eligible for accelerated investment deductions.
A fraud victim seeking tax recovery, financial restitution or an accelerated tax deduction claim who does not wish to be audited by the IRS or who requires tax advice or assistance during the arbitration process or claim substantiation phase of this form of tax relief should consider contacting a tax recovery business which aids fraud victims who've been scammed by a telemarketer or investment adviser.
When there is an intent to defraud, unethical behavior, investment churning, unauthorized transactions, theft-like conduct, a breach of fiduciary duties, or evidence of fraud by the investment adviser, the tax treatment of the investment theft for the American fraud victim suffering a loss of capital needs to be be established with a theft loss report using federal IRS tax form 4684 which covers loss deduction for theft and casualty losses of an unrecoverable loss under IRS tax code Section 165.
While this procedure is somewhat complex, and limited to select higher income victims, a theft loss deduction may be of benefit to those in need of some solace in their time of need.
Tax Relief May Help Recover Major Investment Losses for Fraud Victims
So if you can't get crime victim compensation for stolen money and need a tax deduction or accelerated tax depreciation for a lost investment caused by misappropriation, outright theft, or some bogus financial investment scheme offering that turned out to be a total scam, then consider getting professional advice on how to deduct the theft loss as an allowable capital loss tax claim victim restitution solution.
Taxpayers may be able to deduct the full amount of the loss immediately
against ordinary earned income, all in one year. There is no limit
to a theft loss deduction, unlike the $3,000 annual capital loss
limit for regular investments.
A team of attorneys, CPAs and other financial experts works with the client's tax advisor to determine if the loss qualifies and provides the research and documentation required by the IRS. Preparing this report, typically from 60 to 100 pages, is a time-consuming process. Many tax professionals and Certified Fraud Examiners confidently outsource it to our tax recovery experts on Section 165 of the IRS Federal income tax code.
That's not to say there aren't several common misconceptions about categorizing your §165(c)(2) theft loss under §165(c)(3) or that there aren't tax relief specialists who specialize in ripping you off with false promises and uncorroborated deductions that will come back to bite you in the ass, long after they are gone.
Excellent article on calculating theft loss deductions for investment fraud.
Why CPAs often overlook the deductibility of investment theft losses.
Victims were entitled to theft loss deductions for the year at issue for amounts they ascertained with reasonable certainty that they had no prospect of recovering.