In the News | Financial Advisor
IRS clarifies when taxpayers may deduct losses from fraud
April 14, 2025 · Authored by James Creech
The IRS has clarified how taxpayers can deduct fraud-related losses under Sec. 165 of the Internal Revenue Code. Baker Tilly’s James Creech spoke with Financial Advisor about how victims of Ponzi schemes may qualify for a safe harbor deduction — even if recovery is incomplete. To qualify, the fraudster must be identified, the loss substantiated and there must be no realistic chance of recovery.
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