Are there any tax attorneys here with experience on clawbacks of profits from ponzi schemes and

experience using mitigation?

I expect this thread to become vaporware rather quickly. But on the very remote chance a tax attorney has dealt with this clawbacks and mitigation, I have a couple of questions.

This should be in the cafe. Sorry.

I am not an attorney, but I have investigated many ponzi schemes and have dealt with claw backs and restitution. PM me or ask away.

Mediation or arbitration should not change the underlying law. Often the arbitrators are former judges and you can select one (or a panel) who have much more experience in the area than you’d get from a random assignment at a courthouse.

This is a tax issue about clawbacks. You make money in prior years. You pay taxes on that money. Years later, you find out you invested in a ponzi scheme. You have to pay back your income from the ponzi scheme. You paid tax on that income. There are a couple of ways to get back the taxes you paid on that false income.

I am interested in mitigation. I have a couple of questions for somebody with experience with mitigation. There aren’t too many experts on this. :slight_smile:

I am not a tax lawyer. But would this guy’s tax law website help? It seems right on point, down to the language about mitigation and Ponzi schemes:

He also has some additional links on this page: (scroll down midway)

Maybe you’ve already found it, though.

Here’s the IRS on Madoff clawbacks:

@AttorneyMother, :slight_smile:

Of course I know about that guy. :slight_smile:

I have many links stored on my ipad and iphone. :slight_smile:

Thanks though.

Glad the Google is working well! :slight_smile: Maybe the folks at Bogleheads are more apt to have the specialized info you need.


dstark NJ had a tax court case on the issue. I will see if I can find it and attach the link.

I’m not sure you’ll get any real answers (for free on CC) …that is a $1500/hour type of question.

Tom1944, thanks.

I could not remember the name of the case and checking our web page was no help. I will look Monday for you.

Mitigation (a reduction of the severity) in this context is a reference to the Code provision that allows you to disregard the 3-year statute of limitations and open up a closed tax year. So, if you have to cough up money in a clawback you get to go back and recharacterize a prior year’s tax return because you no longer have that income item on which you previously paid tax.

Here’s another publication by the Lehman tax guy:

@dstark, you may have to pay the pricey tax lawyers or tax accountant to sort out this “claim of right” business to get your refund.

But, in case you haven’t found this, here’s a publication by Stroock: