Investors who fell prey to Bernard Madoff or other fraudsters could recoup some of their losses through the tax system under a bill written by Rep. Bill Pascrell, R-N.J. The Ponzi Scheme Victims’ Tax Relief Act of 2011, HR 1635, would expand the net operating loss carry-back period to 10 years, from five, for Ponzi victims and allow them to declare their losses to collect refunds across previous tax years.
Small investors who lost IRA assets can claim a deduction of 60% of their losses, up to $2 million. This bipartisan bill, whose lead co-sponsor is conservative Rep. Charles Boustany, R-La., reflects continuing anger toward Mr. Madoff on both sides of the aisle.
The bill has been referred to the Ways and Means Committee.
