FTX Sam Bankman-Fried Ponzi Scheme

 The Clawback The clawback is a companion to the ponzi scheme deal. It is well thought out and brings more fairness to those who have lost money. To the extent there are individuals who have made money from the scheme those profits are to be returned to the appointment trustee for distribution to the losing party. When this clawback occurs, generally the income clawed back from the taxpayer will be deductible by the taxpayer in the year it is paid. However, often the deduction in the year the clawback is paid may occur at a much lower tax bracket than the tax bracket that was applicable to the income when it was included in income. To provide for tax equity under specific circumstances, the Internal Revenue Code permits a taxpayer who includes an item in gross income in one tax year and pays tax on that item, and who is compelled to return the item in a subsequent year, to calculate the deduction on the amount that is returned in a unique way. This is known as the ‘‘mitigation’’ se...

Report to Congress: Customer Outcomes in the Madoff Liquidation Proceeding 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. Friday, October 5, 2012 Subject: GAO Madoff report Dear Mr. Lehman, I know it’s been a while since we spoke, but I wanted to follow up with you and send a  copy of our recent report . I’d like to thank you again for the help you gave us. In this case, your assistance helped produce instant results – as a direct result of the conversations we had with private sector tax professionals, the IRS issued new guidance on treatment of clawbacks. We were prepared to recommend the agency do so, but when they saw what we were going to report, they immediately issued the guidance on their own. It doesn’t often happen that change comes so quickly, and this wouldn’t have been possible if you didn’t lend...

The Revenue Ruling 2009-9 and IRS Safe Harbor (Revenue Procedure 2009-20) In 2009, two important documents were issued by the IRS regarding the taxation of Ponzi schemes. In Rev. Rul. 2009-9 , the IRS clarified much of the previously unsettled law in this area. The Rev. Proc. 2009-20 applies to losses for which the discovery year is a taxable year beginning after December 31, 2007; it offers thousands of Ponzi scheme victims a badly needed uncomplicated shortcut to cash refunds from tax losses. These two IRS documents form a good package and were drafted in record time, for any government agency. However, it is important to remember that the IRS is not in business to give back money. The “safe harbor” needs to be studied carefully, because it could be extremely expensive form a tax standpoint. It might be a safe harbor, but the tax cost to dock your boat in this harbor could be very high. To provide a very simplistic example, assume that there are $30 billion of Ponzi scheme losses th...

Richard S. Lehman, J.D./LL.M, United States Tax Attorney With nearly 55 years as a tax lawyer in Florida, Lehman has built a tax law firm with a national reputation for being able to handle the toughest tax cases, structure the most sophisticated income tax and estate tax plans, and defend clients before the IRS. Graduate of Georgetown Law J.D. – Georgetown University Masters in Tax Law from New York University Law School Law Clerk to the Honorable William M. Fay – U.S. Tax Court in Washington D.C. Senior Attorney, Interpretive Division, Chief Counsel’s office, The Internal Revenue Service (IRS) Mr. Lehman has had extensive experience with all areas of the Internal Revenue code that apply to American taxpayers and non-resident aliens and foreign corporations investing or conducting business in the United States, as well as U.S. citizens and domestic corporations investing abroad.  > View Full Attorney Profile. Richard S. Lehman, U.S. Tax Attorney Phone: 561-368-1113 www.LehmanTa...

 — Government Accountability Office (GAO) — • GAO: 80 pager; The Report to Congressional Requesters: Customer Outcomes in the Madoff Liquidation Proceedings. https://www.lehmantaxlaw.com/wp-content/media/pdfs/GAOHQ_AS_ISSUED.pdf ◦ Thank you letter to Richard S. Lehman, from Christopher H. Schmitt, Senior analyst, GAO:  https://www.lehmantaxlaw.com/report-to-congress-on-the-customer-outcomes-in-the-madoff-liquidation-proceeding/ — Informative Tax Law Videos & Presentation Slides — • VIDEO: Tax Refunds From Ponzi Scheme Losses: Tax refunds from Ponzi Scheme losses are extremely valuable.   https://www.lehmantaxlaw.com/tax-refunds-from-ponzi-scheme-losses/ Watch this 50-minute educational presentation and learn your legal rights: • VIDEO: Taxation Of Ponzi Clawbacks: Clawback in a Ponzi Scheme – Maximum Tax Recovery: Watch this 50-minute educational presentation and know your legal rights: The Ponzi Scheme Clawback.  https://www.lehmantaxlaw.com/taxation-of-...

There is no set of fixed rules that clearly define the taxpayer’s reasonable prospect of a recovery, that will result in a limitation of a taxpayer’s theft loss deduction in the year of discovery. However, it is possible to have a grasp of the concept by reviewing court statements defining the concept. We will also look at general principles that have emerged from the court cases and review two cases that could be said to represent the extreme ends of the spectrum of just what is a reasonable prospect of recovery.  Learn more read the full report.  REPORT NO. 2: Download 10 page pdf here  or read online here:  https://www.lehmantaxlaw.com/report2-ftx-ponzi/ Richard S. Lehman, U.S. Tax Attorney Phone: 561-368-1113 www.LehmanTaxLaw.com Located in the Dorot & Bensimon P.L. Domestic & International Tax Law Office 2000 Glades Road, Suite 312, Boca Raton, FL.  33431

The following is Report No. 1 in what is intended to be a series of reports focusing on the tax benefits available as a result of the FTX fraud. Each taxpayer has their own unique factual situation which is going to need to be reviewed by tax advisors and litigation counsel before any legal conclusions can be reached. The Reports are being made in a series form since there is still a great deal of facts to be uncovered in the FTX fraud. These facts are going to be extremely important in coming to conclusions about tax positions. Furthermore, there could be guidance from the I.R.S. in this particular situation or any number of other factors that require the subject matter to be updated on a continual basis. The FTX fraud has resulted in much pain throughout the world. Hopefully some of this can be eased in the form of tax relief from either the U.S. or other countries whose citizens are entitled to permit their financial losses to be deducted from their taxes.  Read Full REPOR...

Description: DECLARATION OF JOHN J. RAY III IN SUPPORT OF CHAPTER 11 PETITIONS AND FIRST DAY PLEADINGS FTX bankruptcy filing 11/17/22 by Steven Tweedie