Help for Victims of Ponzi Investment Schemes

 

The IRS provides two items of guidance to help taxpayers who are victims of losses from Ponzi-type investment schemes.

  • Revenue Ruling 2009-9PDF provides guidance on determining the amount and timing of losses from these schemes, which is difficult and dependent on the prospect of recovering the lost money (which may not become known for several years).
     
  • Revenue Procedure 2009-20PDF simplifies compliance for taxpayers by providing a safe-harbor means of determining the year in which the loss is deemed to occur and a simplified means of computing the amount of the loss.

For an overview of this guidance, see IRS Commissioner Doug Shulman's March 17, 2009, testimony before the Senate Finance Committee on tax issues related to Ponzi schemes.

Questions and Answers

  • FAQs Related to Ponzi Scenarios for Clawback Treatment
     
  • Do you have questions on what to do if you've invested in a Ponzi scheme? If so, these questions and answers may help.
     
  • Do you have questions on what to do if you took a tax loss due to a Ponzi scheme investment but later recovered some of your investment? If so, these questions and answers on the tax treatment of distributions received from a trustee/receiver may help. A trustee or receiver may use this information to respond to questions from investors and may include a copy of these questions and answers with any distributions sent to investors.