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By the Opalesque Team: A little over two weeks out from the discovery of the $50bln Madoff fraud, investors who had initially focused on legal channels to try and reclaim lost funds are now also grappling with questions over the implications of such a case on their tax strategies.

Legal firm Proskauer Rose hosted a teleconference on December 19th which attracted 1,200 of the Firm’s clients and other invitees dial in to listen to topics such as how Securities Investor Protection Corporation (SIPC) and may be applied in the Madoff case. In addition to this and other legal topics the call included some discussion of the tax implications for investors into such a fraud.

With 2008 year-end almost upon us, and statute of limitations requirements running the clock on many tax issues, accounting firm Marcum & Kliegman LLP announced the formation of a Madoff Task Force as well as some recommendations for initial steps which defrauded investors may decide to take.

Fraud caused investors to overstate taxes in recent years In a statement the firm advised that those who invested directly or through a fund of funds vehicle will likely be able to categorize losses as theft. Additionally, the firm recommends gathering all documents, for in addition to determining the extent of investment losses, income for taxpayers who received tax reports from their investments has likely been overstated and as such these taxes should be refunded.

“In many cas......................

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