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When the story of Bernard Madoff's $65 billion Ponzi scheme first broke, the wide-reaching effects of his fraud and the number of victims were unknown. Investors and CPAs waited anxiously for the Internal Revenue Service (IRS) to provide guidance on how losses from "investments" in Madoff's "funds" should be reported on 2008 tax returns. Thus far, there have been lots of questions but few answers, and the IRS has been publicly silent on these matters. The Madoff scheme continues to expose cracks in the financial reporting and tax reporting systems. A lack of leadership by those charged with providing guidance for CPA's may tempt some to base their accounting decisions in this matter on their fear of litigation, and persuade others that there is safety in numbers.
Accounting for the Madoff Fraud Mary-Jo Kranacher The CPA Journal; Apr 2009; 79, 4; Docstoc pg. 80 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
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