Tax relief for Madoff's Ponzi investors

On Tuesday the Internal Revenue Service released guidelines to provide relief to the victims of the Madoff’s investment scam. Investors that lost their money with one of the most scandalous financial fraud in the history will be allowed to deduct losses to theft in the 2008 tax year and recover any taxes paid on nonexistent income.

According to the guidance the losses of the investors are classified as theft losses, rather than capital losses, which means that the customers will be able to avail of the bigger deduction.

Meantime, federal prosecutors have discovered $1 billion of the estimated more than $50 billion, the amount that was allegedly taken by Bernard Madoff from the investors.

At the moment Madoff is in prison and faces up to 150 years in jail. The sentencing is scheduled for June.