Can someone deduct money lost in one of those overseas scams? Client lost $500,000. I believe money lost from blackmail can be deducted, but not sure about scams.
I had a client scammed and to make make matters worse they received 1099-Rs as they paid the scam with IRA withdrawals. I called local congressman's office and they have a person there that advocates between the IRS and the taxpayer and we are petitioning that the income tax due to the 1099-Rs be written off as uncollectable.
