Ponzi scheme victims get to write off 95% of losses – Welcome to the American Ponzi scheme

April 5, 2009 · Posted in Big Business Ripoffs, Financial Crisis, Political Figures, Political Issues, Thoughts on the economy · Comment 

This is a sad sad day for the American taxpayer.  Apparently, the United States tax system is officially only in place to take money from stupid Americans and make every possible exception for those tax payers who have the power to manipulate our representatives.

I sympathize with people who were swindled by criminals, I hate that people in this world try to skate through life by stealing from others.  The world would be a much happier place, if these types of people would simply vanish.  However, none of the investors who were victims of criminals has earned even $1 dollar of my money or yours.

Am I missing something or has the U.S. tax system somehow morphed into a nanny state system?  I for the life of me cannot figure out how or why U.S. taxpayers deserve to become victims of these Ponzi scheme criminals, but that is exactly what is happening if we us non-victim money to bail them out.

Over the last 100 years there have been numerous scammers and thiefs who stole countless dollars from millions of Americans, but I do not recall a single instance where their grief and suffering somehow became all of American’s problem.  But you take one high flying Wall Street banker, and an elaborate scheme to steal from his influential clients, and all of the sudden we all have to bail them out.

Again, I have sympathy for those who lost money by the heartless acts of criminals, but our congress is no better than Bernard Madoff when it comes to robbing Peter to pay Paul, with absolutely no regard for the little tax payer who keeps their engine of greed running.

Here is an article that discusses the tax break, if you want to read the facts, instead of my rant.

WASHINGTON — The Internal Revenue Service announced unprecedented tax relief for victims of Ponzi schemes, saying many of those affected could deduct up to 95% of their losses immediately.

The move, which corresponded with a congressional hearing on the issue Tuesday, represents a significant relaxation of longstanding limits on tax relief for victims of investment scams. It reflects the pressure officials are feeling to help individuals who have been hurt in the current financial crisis, particularly at a time when public resentment is growing over the billions of dollars the government is directing into troubled banks and other big corporations.

The IRS action drew praise from lawmakers, who have been pondering legislation to help victims of swindlers such as Bernard Madoff, who has pleaded guilty to securities fraud and other charges, after confessing to running a $65 billion Ponzi scheme. “It’s a rare day when someone can be happy with the IRS,” said Sen. Charles Schumer (D., N.Y.) at the hearing held by the Senate Finance Committee.

The IRS guidance is more favorable to victims than prior positions the agency has taken, said Robert Willens, a New York tax adviser.

In broad terms, the IRS said Ponzi scheme victims who aren’t suing to recover their losses can generally deduct up to 95% of their qualified losses — minus any potential recoveries from insurance or the Securities Investor Protection Corp. — in the year the fraud is discovered. Those pursuing third-party recoveries can deduct 75% of relevant investments, after potential recoveries. The Securities Investor Protection Corp., or SIPC, is an organization designed to help investors at failed brokerage firms.

The IRS said victims wouldn’t be subject to limits that apply to personal casualty or theft losses and could carry back net operating losses five years to offset taxes paid, or forward 20 years. Under prior rules, many investors had to subtract $100 and 10% of their adjusted gross income from their loss deductions, and could carry back losses only three years, or forward 20 years.

In another change, the IRS said investors can include their principal, as well as any so-called phantom income they have received over the years, in their theft-loss deductions. Previously, the IRS allowed some Ponzi scheme victims to deduct only their principal as a theft loss, not phantom income.

The changes left open a number of questions, including how to help people who had invested in Ponzi schemes through nontaxable accounts such as Individual Retirement Accounts. People who invested indirectly through feeder funds potentially face a more complex situation in getting relief under the changes.

Sen. Charles Grassley of Iowa, the ranking Republican on the Senate Finance Committee, said he was concerned that the guidance would “encourage tax cheats to take abusive deductions.”

IRS Commissioner Douglas Shulman said any taxpayers who seek the new relief must file special forms identifying themselves as Ponzi victims. That will make it easier for the IRS to monitor claims and “look behind these, so we don’t have a lot of fraud,” he said.

The government has also limited tax-loss claims by individual investors that apply to normal losses from trading, due to concerns that it could result in a large loss of government revenue. But Sen. Maria Cantwell (D., Wash.) Tuesday said Congress should consider liberalizing those rules to help more consumers.

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Time for a new book about Bernard Madoff and all these suicides – I smell conspiracy

January 7, 2009 · Posted in Big Business Ripoffs, Entertainment, Financial Crisis, Government, People in the news · Comment 
Bernie Madoff just looks like a crook

Bernie Madoff just looks like a crook

Do you think anyone out there is writing a story about the underworlds of the financial pyramid, and the small group of influential people who control it all?  I can see the plot lines now.  All of the world’s great puppet masters force Bernie Madoff to take the fall for their loses to keep some horrible secret about the Madoff family from becoming public.  Madoff finally acquiesces to the scheme because he is dying of some illness, and it is the only way to save his family. Keep in mind Madoff is not a hero in this story but a co-conspirator who is just as guilty as the rest.

So the plan is hatched and the superpowers push their loses into his fund, and take the remaining money to make themselves whole, and to carry on with their world domination.  In addition to Madoff’s fund they have also done this with major public corporations but in more elaborate ways, like CDOs, short selling and debt-swaps.  Then of course some of the pack and/or their friend’s find out about the plot and can not live with the guilt, so the financial superpowers have them killed one-by-one until the story finally dies off and is buried at the highest levels of the world’s governments, including the President and the U.N..  Obviously this is just a movie or book plot, but I bet someone could come up with a more in depth version quickly.  Just be sure to give me credit for the idea, because I could use the money, my Madoff investment is not looking so hot right now.

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