TAX RELIEF FOR MADOFF PONZI VICTIMS

TAX RELIEF FOR MADOFF PONZI VICTIMS took a step forward, thanks to House Ways and Means Committee member Kendrick Meek (D-Fla), who introduced a bill to help people who have lost their retirement savings. Aimed in large part at helping older Americans, the measure would permit fraud victims to go back up to 10 years to identify and seek refunds for taxes paid on retirement income that has since proven to be fiction.

“While their initial investment cannot be saved,” Meek said, “the taxes paid on that income can. These investors, many who are older Floridians from retirement communities living on a fixed income, were defrauded and now face an uncertain future. They are liquidating assets, selling real estate and returning to work in the midst of an economic recession. This legislation provides some degree of relief, allowing them to recoup taxes paid on phantom income.”

The US Tax Code already has provisions to provide for fraud victims who aren’t suing to recover their losses. In most cases , they can deduct up to 95% of their losses in the year the fraud is discovered. Meek said that by extending the carry-back period to 10 years, older Americans will have a greater chance of recouping higher amounts of taxes paid, as many of them were then working.