Contact Paul +

Time limit is exhausted. Please reload CAPTCHA.

Theft Loss Deduction

Tax Court – No theft loss or bad debt deduction for taxpayer’s seemingly bad investment

Tax Court – No theft loss or bad debt deduction for taxpayer’s seemingly bad investment

Riley, TC Memo 2016-46 The Tax Court has held that a taxpayer’s investments in and loans to a rather questionable business venture of an acquaintance did not qualify for a theft loss deduction because she didn’t prove that her acquaintance made false representations. The taxpayer also did not qualify for a bad debt deduction because […]

Read the full article →

Court of Federal Claims – year fraud perpetrators were indicted wasn’t year theft loss was deductible

Court of Federal Claims – year fraud perpetrators were indicted wasn’t year theft loss was deductible

Adkins, (Ct Fed Cl 2/23/2016) 117 AFTR 2d ¶ 2016-449 The Court of Federal Claims has held that, while it agreed with the taxpayers that they had a theft loss as a result of being the victim of securities fraud, the loss wasn’t deductible in the year the perpetrators were indicted because the taxpayers did […]

Read the full article →

Tax Court holds no theft loss deduction in Ponzi scheme for unpaid services not included in income

Tax Court holds no theft loss deduction in Ponzi scheme for unpaid services not included in income

Haff, TC Memo 2015-138 The Tax Court has concluded that an individual wasn’t entitled to a theft loss deduction for amounts that a partnership, that was alleged to be a Ponzi scheme, owed him for fees for his services in the development, sales, marketing, and construction of condominiums and townhouses. The taxpayer, who hadn’t included […]

Read the full article →

Stock Loss Due to “Pump And Dump” Scheme Doesn’t Yield a Theft Loss Deduction

Stock Loss Due to “Pump And Dump” Scheme Doesn’t Yield a Theft Loss Deduction

Greenberger v. U.S., (DC OH 06/19/2015) 115 AFTR 2d ¶2015-844 A district court has held that a taxpayer couldn’t claim a theft loss deduction for exchange-listed stock that became worthless due to the “pump and dump” fraud of company executives. The taxpayer bought his shares on the open market through his brokerage account, and there […]

Read the full article →

IRS provides guidance on empowerment zone designations in light of TIPA

IRS provides guidance on empowerment zone designations in light of TIPA

Notice 2015-26, 2015-11 IRB In a Notice, IRS has explained how a State or local government amends the nomination of an empowerment zone to provide for a new termination date, as provided for by Code Sec. 1391, as amended by the Tax Increase Prevention Act of 2014 (TIPA, P.L. 113-295, 12/19/2014). Background. Under Code Sec. 1391, […]

Read the full article →

Case Alert – No theft loss for amounts taxpayer claimed were mis-invested by his former wife

Case Alert – No theft loss for amounts taxpayer claimed were mis-invested by his former wife

In West v. Commissioner, T.C. Memo. 2014-2, the Tax Court has denied a theft loss deduction to a taxpayer who gave his ex-wife signature authority over his bank accounts and then claimed that she invested the funds in a way that he didn’t authorize, that took away his ability to control the investment. Facts. The […]

Read the full article →

IRS provides non-safe-harbor guidance for Ponzi scheme victims

IRS provides non-safe-harbor guidance for Ponzi scheme victims

In Program Manager Technical Advice 2013-003, IRS has provided guidance to persons who have “phantom income” from a fraudulent investment scheme and who do not or cannot use the safe harbor procedures provided in Rev Proc 2009-20, 2009-14 IRB 749. Click here for the text of Program Manager Technical Assistance 2013-003. Program Manager Technical Advice. […]

Read the full article →

Ponzi scheme victims allowed theft losses despite lack of direct investment with perpetrator

Ponzi scheme victims allowed theft losses despite lack of direct investment with perpetrator

In Chief Counsel Advice (CCA) 201213022, the IRS has determined that Ponzi scheme losses suffered by taxpayers are theft losses under Code Sec. 165, even though the taxpayers invested through individuals other than the perpetrator. IRS found that the facts showed that there was privity between the taxpayers and the perpetrator. Background. A taxpayer can […]

Read the full article →

SEC Freezes Assets of Missing Georgia-Based Investment Adviser

SEC Freezes Assets of Missing Georgia-Based Investment Adviser

Editor’s Note:  often in the cases we handle there are cross investigations with different federal and/or state agencies.  One example, is the Securities and Exchange Commission.  This news event caught my eye and it is fairly typical of what happens – – Ponzi scheme, investor losses, IRS investigation, no deduction or limited deductions [read:  Bernie […]

Read the full article →

IRS Chief Counsel Advice 20012-13022: Ponzi Scheme Victims Given Some Relief

IRS Chief Counsel Advice 20012-13022: Ponzi Scheme Victims Given Some Relief

Ponzi scheme victims allowed theft losses despite lack of direct investment with perpetrator Chief Counsel Advice 201213022 In Chief Counsel Advice (CCA), IRS has determined that Ponzi scheme losses suffered by taxpayers are theft losses under Code Sec. 165, even though the taxpayers invested through individuals other than the perpetrator. IRS found that the facts […]

Read the full article →
Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

Read More

Connect With Paul on Social Media

Practice Areas & Information

Certifications &
Associations
Member CA Bar Member Orange County Bar US Tax Court Attorney