Ponzi Scheme relief. Carryback and forward like NOL?

[Jack from Ohio]

Client called as being the victim for over 5 years of a ponzi scheme. It was unearthed in March 2009. I understand that the Rev. Proc. allow the losses to be claimed as theft losses. The client is saying an IRS agent told him that the losses can be carried back up to 5 years and forward up to 20. The agent apparently said the theft losses are being treated just like NOL.

I don't read the carryback/carryforward in the Rev. Proc.

Am I missing something?

The Ponzi scheme was run as a bank offering CDs for investors offering (for 2008 & 2009) 8% return. The "bank" even issued 1099INT for the victims and those incomes were claimed.

[ed_accountant]

Please read IRS Revenue Procedure 2009-20

http://www.irs.gov/pub/irs-irbs/irb09-14.pdf

[Maribeth]

Client called as being the victim for over 5 years of a ponzi scheme. It was unearthed in March 2009. I understand that the Rev. Proc. allow the losses to be claimed as theft losses. The client is saying an IRS agent told him that the losses can be carried back up to 5 years and forward up to 20. The agent apparently said the theft losses are being treated just like NOL.

I don't read the carryback/carryforward in the Rev. Proc.

Am I missing something?

The Ponzi scheme was run as a bank offering CDs for investors offering (for 2008 & 2009) 8% return. The "bank" even issued 1099INT for the victims and those incomes were claimed.

Theft losses deductible on Schedule A are considered a business loss for purposes of computing a current year net operating loss.

Maribeth