Chadbourne claims tax victory in Madoff case

Chadbourne & Parke is claiming a major victory on behalf of clients who are victims of Bernard Madoff and his $65bn Ponzi scheme following a ruling today by the US Internal Revenue Service.

The IRS has announced that it plans to issue guidance on its website allowing victims of Madoff’s scheme to claim tax refunds for their losses. Until now it had been thought likely that victims would have to wait years to recover losses until there had been a final accounting through the courts.

The move follows a letter sent from Chadbourne counsel Governor George Pataki to the Treasury Department in January in which the former New York governor requested a meeting to discuss changes to the tax rules in favour of the Madoff victims.

A meeting was held in early February during which Pataki and Chadbourne partners Don Schapiro and Richard Leder lobbied the Treasury to allow victims of Madoff to claim fraud losses on their 2008 income tax returns.

“This is great news for our clients,” Schapiro said. “The IRS followed our position exactly. We presented the arguments and analysis to support the results on the basis of existing law.”

Schapiro added the outcome was sensible, given the facts in the Madoff case and the number of people involved.