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Follows Recommendation Made to Treasury and IRS by Chadbourne & Parke
New York — March 19, 2009 — The IRS guidance allowing victims of Bernard Madoff’s ponzi scheme to seek tax relief adopted in full the recommendations made to the Treasury Department and the IRS by the international law firm of Chadbourne & Parke in January.
IRS Commissioner Doug Shulman announced on March 17 that the IRS was issuing guidance on its website allowing victims of the $65 billion ponzi scheme to follow a safe harbor procedure which would provide immediate and virtually complete tax relief. The IRS safe harbor allows deduction of 95% of the loss on the account, less any anticipated insurance recoveries from the Securities Investor Protection Corp. (SIPC).
The IRS ruling mirrors a recommendation made to the agency by three attorneys of Chadbourne. Former New York Governor George Pataki, a counsel to the firm’s corporate, climate change and environmental practices, wrote a letter on January 9, 2009. Governor Pataki and tax partners Richard Leder and Donald Schapiro met with agency officials to outline and explain their recommendations and describe why they thought the proposals were consistent with existing law, were fair to both taxpayers and the IRS, and were administratively feasible.