2009-01-13 06:08:02 -

Tax refunds could help victims of the alleged Bernard Madoff Ponzi scheme recover 35- to 50-percent of their losses, an issue largely overlooked by many claimants, according to attorney Richard Lehman, a U.S. tax law expert.


"The IRS acknowledges Ponzi schemes as "theft losses,' and there are several methods of tax recovery available," said Lehman, a prominent tax

attorney in Boca Raton, Florida and former senior attorney for the IRS. "However, each of these potential options of recovery has its limitations, restrictions and strict requirements that must be met in order to take advantage of the maximum tax benefits from the alleged Bernard Madoff theft."


According to Lehman, victims of any Ponzi scheme, including the alleged Bernard Madoff fraud, may have the following three tax refund options:


- "Theft Loss" - In a Ponzi scheme, theft loss is an extremely valuable tax deduction that could have a cash value equal to 35- to 50-percent of the lost investment, depending on city, state and federal income taxes.
- "Capital Return" - In certain cases, funds that were paid from a Ponzi scheme and reported as "income' in a previous year may instead be considered a return of the defrauded investor's capital.
- "Phantom Income" - Income taxes paid by Ponzi investors on what turns out to be fake profits, or "phantom" income, may be recovered as theft losses or under certain circumstances by re-characterizing the income as non-existent.
Lehman also cautions victims of the alleged Bernard Madoff Ponzi scheme against two common mistakes that will limit the potential tax recovery: failure to deduct tax losses in the proper year and entering into premature settlements that convert theft losses into capital losses of lesser total value.


All of the issues involved in maximizing the tax recovery from the alleged Madoff fraud or other Ponzi schemes, in addition to litigation options, are being discussed in-depth in a special eight-part TV series that will air Fridays at 7:30 p.m. EST, beginning January 16th, on WXEL's "Wealth & Wisdom" show.


For more information, visit www.bernardmadofftaxloss.com or www.lehmantaxlaw.com.








Reeves Laverdure Public Relations

Michael Sias, 561-391-8717