Madoff takes a big bite out of the IRS

In the latest Madoff news, the IRS has decided to extend broader benefits to the Ponzi schemer's former clients. Depending upon the level of litigation that the victims are seeking, the government will allow them to claim theft-loss deductions of up to 95% for up to five years.

For all his faults, there is no question that Bernie Madoff was thorough. One of his victims, Judith Welling, said of her investment with him: "I paid taxes on it every year. You would get a statement from Madoff, with all his supposed buys and sells." In addition to providing his racket with an apparently legal cover, Madoff's statements have also given his victims a record of the taxes that they paid, the money that they invested, and the benefits that they may now receive from the IRS.