Quote:
Originally Posted by boba
What about the taxes people paid for gains which were fictitious? You think the IRS will give that back?
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That's a good question.
After HealthSouth was exposed to have been cooking its books, it received tax refunds for the taxes it paid on fictional income. If I remember correctly, the government changed the law after that, so corporations can no longer seek refunds for taxes paid -- that weren't really owed -- as a result of accounting fraud.
I don't know how that works for individuals. From what I've read, Madoff's "investors" were required to pay their own taxes; his "fund" didn't pay on gains. I would hope that the victims could file amended returns and receive refunds, but I think they are limited to something like 3 years on filing amended returns for refunds.
From what I'm reading, the legal precedent will allow the receiver overseeing the fund now to reach back as far as 6 years and "take back" any money (possibly including returned principal) the investors received from Madoff.
There will be no winners in this for the "investors" who entrusted money to Madoff.
I still cannot believe that his sons are not involved. Imagine, he is a 70-year-old man working on the floor below the one his sons are working on, and the sons haven't spoken with their father about him teaching them about his dealings so that they can take over managing investors money after he dies???
I suspect there was an organized attempt to keep the sons' names "clear" so that if the fraud collapsed, the father alone would "take the fall." The sons turning the father in was a near perfect move to end the fraud and allow the sons to escape the punishment they probably deserve. Any current investigation should probably be focusing more on the sons right now, rather than on the old man.
I suspect there are billions hidden outside the country.