Madoff victims seek tax refunds


Hundreds of Californians who lost money in Bernard Madoff's Ponzi scheme are asking state legislators to change laws so they can get refunds of past taxes paid on income from Madoff that they might never have received.

The victims say that for decades Madoff used steady, solid earnings to entice investors, causing his fund to grow with money from new customers being paid out as dividends to earlier clients until it collapsed late last year.

More than 400 of Madoff's victims who live in California are seeking passage of a bill that would allow them to get back tax payments on so-called phantom income -- profits that appeared on their annual account statements but didn't actually exist and were never paid to the investor -- from the last five years, according to a Los Angeles Times story.