Schemes, Scams, and Swindles: The Danger of Ponzi Schemes


Ponzi schemes aimed at defrauding unsuspecting individuals and taking their money have existed for hundreds of years. The Madoff scheme brought this type of scam to the attention of the American public in 2008, but there are many other such schemes that have operated in the United States since then. The purpose of this course is to familiarize tax professionals with Ponzi schemes and help them identify the hallmarks of such schemes. The guidance offered to financial professionals to deal with clients who have suffered Ponzi losses is presented and discussed, together with examples from the U.S. Tax Court in which taxpayers are seeking to recover their losses.

Learning Objectives

After successfully completing this course, students will be able to:

  • identify the general operating methods of a Ponzi scheme
  • recognize the typical hallmarks that are frequently the identifying characteristics of a Ponzi scheme
  • identify the methods used by the IRS to communicate guidance to professionals who represent taxpayers who have suffered losses from Ponzi schemes
  • list the two different methods supported by the IRS for the reporting of Ponzi losses by individual taxpayers
  • identify the role played by banks and other financial professionals in the operation of Ponzi schemes

Tax Year: 2024

Designed For

CPAs, tax pros, and other finance and accounting professionals



Advanced Preparation: None

Advanced Preparation


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