Phone scam

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  • oceanlovin'ea
    Senior Member
    • Jun 2005
    • 2682

    #1

    Phone scam

    Client sent $$720 to an address in Pennsylvania. It was a scam. They were told they had won $2.5 million dollars. The amount they were to send was to finish up the income tax owed on the money.
    Then they were supposed to send more money but got smart and didn't do it. They filed a police report.

    Is this deductible on tax return?

    Linda, EA
  • Justataxguy
    Senior Member
    • Jan 2013
    • 153

    #2
    Possibly on line 20 of Sch.A?

    Comment

    • FredcpaAZ
      Junior Member
      • Feb 2008
      • 10

      #3
      would also need form 4684

      Comment

      • FEDUKE404
        Senior Member
        • May 2007
        • 3646

        #4
        Best solution

        Unless you think you could prove an "investment loss" (highly unlikely) then you are dealing with a theft/casualty loss and the infamous ("When is the last time you even did one?!?") Form 4684.

        With the $ floor and the 10% AGI issue, it is unlikely there would be anything deductible even if you could jump through all the hoops for a legitimate "casualty loss."

        Your client may best spend his money on some counseling...."a fool and his money are soon parted" or something like that.

        FE

        Comment

        • oceanlovin'ea
          Senior Member
          • Jun 2005
          • 2682

          #5
          They came back to them and wanted more money. He was supposed to mail it to a local address in his town. But he decided to go see where the address was and changed his mind. He could have been out several thousands of dollars. He is 92 and I thought had better sense.

          They don't itemized any more. They didn't even have taxable income this year. So we just dropped it.

          Thanks for the ideas.

          Linda, EA

          Comment

          • Roland Slugg
            Senior Member
            • Aug 2006
            • 1860

            #6
            It amazes me that anyone falls for those scams ... whether they originate in Nigeria, Yemen, or the good ol' USA. Seems to me the logical reply, if you want to reply at all, would be to say, "Just deduct what I owe from the $7,000,000 (or whatever) and send me the balance."
            Roland Slugg
            "I do what I can."

            Comment

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