Have Tax Questions? Ask a Tax Expert for Answers ASAP
If you sent a final schedule K-1 for your business, you've done what you have to. The investor's accountant is mistaken.
The investor should record a bad debt loss on Schedule D in the year his loan to your company became worthless, if applicable.
Losses on the partnership / S-corp interest (given schedule K statements had been sent) would be subject to certain tax treatments depending on the investor, but the investor's accountant needs to help him with that. A final K-1 signifies the business has been closed. If the investor's accountant needs more information, he/she should ask you for it directly.
Tell your investor to have his accountant call you directly and put a stop to this nonsense.