Investors allegedly defrauded by Bernard Madoff and R. Allen Stanford will be allowed to claim theft losses as deductions on their tax returns, Internal Revenue Service Commissioner Douglas Shulman said.
Shulman told the Senate Finance Committee the agency will explain today how losses can be claimed and is creating procedures for investors who may need to amend their tax returns.
“The IRS is today issuing guidance articulating the tax rules that apply and providing ‘safe harbor’ procedures for taxpayers who sustained losses in certain investment arrangements discovered to be criminally fraudulent,” Shulman said.
