On May 31st, the ABA Tax Section made a number of recommendations for inclusion in the IRS’s 2024-2025 Priority Guidance Plan as to tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices, and other administrative guidance. ABA Recommendation. Happily, one issue recommended for further guidance concerned victims of certain scams. Guidance was requested under section 165(c)(2) that would address the treatment by victims of certain imposter scams as transactions entered into for profit. Many scams, including advance-fee scams, are designed to lure taxpayers with promised investment returns. Also, guidance was requested under section 165(e) that would address the timing of discovery of a scam loss. While victims of scams may be immediately aware of (and, in fact, assist in) the transfer of the funds, the nature of that transfer as a scam may only be discovered in a later year.
Both recommendations are rated as a high priority. This is welcome news as we have in these pages previously described the difficulties encountered by victims of scams: Tax Relief for Scam Victims.