Information Relating to Tax Issues

The IRS has issued two guidance items to assist taxpayers who are victims of losses from Ponzi-type investment schemes. The first item is a ruling (Rev. Rul. 2009-9) that clarifies the income tax law governing the treatment of losses in such schemes. The second is a procedure (Rev. Proc. 2009-20) that provides a safe-harbor method of computing and reporting the losses. These items are set to be officially released on April 6, 2009.

The Receiver recommends that you consult with a tax professional regarding the above revenue ruling and procedure.

The following information may be helpful to you in your discussions with such a tax professional. The Receiver has determined that fraudulent activity occurred beginning at least as early as 2003. This fraudulent activity was discovered in 2009. It is still too early in this Receivership to determine or even estimate how much money individuals with legitimate and recognized claims may ultimately recover. The Receiver has not yet made any determination as to whether he will provide Form K-1s for the year 2008. Once he makes a determination regarding this issue, his decision will be posted to this website.

Other related articles which may be of interest to you are:

Herald Tribune Article, Published 3-18-09

Senate Finance Testimony on Ponzi Schemes

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