Very often there may be a Ponzi Scheme financial theft, in which certain taxpayers have profited since they made early investments and were paid unusual profits that did not exist. Often taxpayers in Ponzi Schemes that have benefited from the financial loss of others are called upon by a trustee to forfeit the profits made in the Ponzi Scheme.
Taxpayers who do forfeit such funds (the Clawback) have the ability to either deduct their funds against other income and/or to go back in time to when the false profits were made and receive a tax refund of the taxes paid at the time. Often this is a better source of tax refunds since the profits may have been made in extremely high tax brackets, thus leading to increased refunds.
Below is a short 8-minute video segment on the Clawback:
Below is a complete 1.5-hour presentation: The Valuable Tax Refunds From “Clawback” Repayments
- Taxation of a Clawback Presentation slides: download slides as pdf
- Taxation of a Clawback Seminar script: view text or download as pdf
- IRS Revenue Ruling: download as pdf
- Revenue Procedure: download as pdf
The U.S. Government Accountability Office (GAO) is an independent, nonpartisan agency that works for Congress. Often called the “congressional watchdog,” GAO investigates how the federal government spends taxpayer dollars. View letter from GAO to Richard Lehman regarding his assistance.
Ask Tax Attorney Richard S. Lehman: