Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

Hello! By inheritance, I received church bonds. These were

Customer Question
Hello! By inheritance, I received church...
Hello!

By inheritance, I received church bonds. These were investments held by the Alanar Group which went into receivership some years ago for fraud and theft of investments. The receivership has been making payments to church bond investors of 11% per year of the principle, no interst.

My question is regarding the Fraud Recovery Group, Inc. They want to file the IRS 165(c)(2) for years 2005-2008. In talking with them, it is the return of all taxes paid for the above years.

Before continuing any further inquiries with them, I need sound tax advise that this group is on the up and up. If it sounds to good to be true, it usually is.

Appreciate your help.

Nancy Dunn
Centre, Alabama
Submitted: 7 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 1 day by:
5/4/2010
Tax Professional: Arthur Rubin, Tax Preparer replied 7 years ago
Arthur Rubin
Arthur Rubin, Tax Preparer
Category: Tax
Satisfied Customers: 1,561
Experience: 22 years of tax preparation experience, including individual, trust, and estate returns.
Verified
Thank you for using Just Answer.

I have not been able to verify whether your "Fraud Recovery Group" is a scam. (I'm a tax preparer, not a scam investigator.) However, a group by that name has an "F" rating with the Better Business Bureau, and the Department of Justice has sued Tobias Elsass of Columbus, Ohio, and the Fraud Recovery Group, a Worthington, Ohio, company, to prevent them from filing tax returns, claiming that many of the section 165(c)(2) returns they filed were improper.

In spite of the group being questionable, it may be that you may claim a section 165(c)(2) loss on your return.

The basic idea of using section 165(c)(2) is that an investment loss induced by fraud may be considered a "business theft loss" under the Tax Code. (It also applies if the money you requested to pay for bonds was actually diverted for other purposes.) You (the person or entity who owned the bonds at that time) may declare the difference between your basis in the investment, and the expected amount of recovery, as a "casualty of theft loss" as an itemized deduction on the 1040 Schedule A in the year of discovery. This loss is not subject to AMT, or the itemized deduction phase-outs; and, if it reduces your income in the year of discovery to less than 0, it may produce a Net Operating Loss (NOL), which can be carried back 2 (or more) years against income in those years, or carried forward to later years. (If it's the estate, the loss, logically, could be carried forward to the beneficiaries' returns, as excess deductions on the estate's final income tax return, but I'm not sure it retains the characteristics of an NOL, so that it might only be allowed against that return, not against returns in later years. If that's your situation, I'd need to research the matter further.)

Additional points, though: As the payout schedule has apparently been set, you know the amount of recovery, although, for tax purposes, some of the recovery has to be assigned to interest, increasing the loss, but adding additional taxable intrest in future years.

If the discovery was less than 7 years ago, you may amend the return of whoever owned the bonds at the time of discovery; it could be you, the person you inherited the bonds from, or his/her estate.

Edited by Arthur Rubin on 5/4/2010 at 7:45 PM EST
Arthur Rubin
Arthur Rubin, Tax Preparer
Category: Tax
Satisfied Customers: 1,561
Experience: 22 years of tax preparation experience, including individual, trust, and estate returns.
Verified
Arthur Rubin and 87 other Tax Specialists are ready to help you
Ask your own question now
Ask Arthur Rubin Your Own Question
Arthur Rubin
Arthur Rubin
Arthur Rubin, Tax Preparer
Category: Tax
Satisfied Customers: 1,561
1,561 Satisfied Customers
Experience: 22 years of tax preparation experience, including individual, trust, and estate returns.

Arthur Rubin is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
If a s-corp tax return was paper filed under the wrong EIN,
If a s-corp tax return was paper filed under the wrong EIN, what do I need to do to correct that? Do I prepare an amended return with just that change?Thanks, JW… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Lev, I am preparing federal unfiled tax returns for a client
Good morning Lev, I am preparing federal unfiled tax returns for a client of mine. I am also ready to finalize the 2014 tax return and there is an NOL created on his return. The client has already fil… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I want to be able to stop filing tax returns. What are my
I want to be able to stop filing tax returns. What are my options. I currently am 40 and live off an inheritance. I only make $8000 per year in interest income from a mortgage I hold. I live in Pennsy… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
For a ny state partnership tax return, if you file an
For a ny state partnership tax return, if you file an extension but don't pay anything and then end up owing a lot. Do they still recognize the extension or do they charge a failure to pay penalty (fo… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
IRS Experts Corporation changed name. 2016 tax return has
IRS ExpertsCorporation changed name. 2016 tax return has been filed with a new name. Taxpayer recently received notice which has old name. How do we change the name with IRS?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,452 satisfied customers
When bank refinance do they verify tax returns with IRS?
When bank refinance do they verify tax returns with IRS? Because I did the refinance and bank didn't ask me for transcript signature, or Can they do it without my authorization ?… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
717 satisfied customers
What are tax rules for an inherited Roth IRA, GA, the
what are tax rules for an inherited Roth IRA JA: Since estate law varies from place to place, can you tell me what state this is in? Customer: GA JA: What documents or supporting evidence do you have?… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I filed for an extension to file my 2017 income tax return.
I filed for an extension to file my 2017 income tax return. I recently suffered a stroke - 6 weeks ago - and have been unable to finalize my return. I should be able to file it within the next 30 days… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,452 satisfied customers
Mortgage Interest Taxpayer inherited two homes in the same
Mortgage InterestTaxpayer inherited two homes in the same year. One from each parent, both were primary resident of deceased parent. Deceased parents were divorced and both died within 12 months of ea… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Is a tax return less likely to be audited if it's prepared
Is a tax return less likely to be audited if it's prepared by a CPA or simply a tax person? Secondly, our Rotary Club is a 401 C for we have a 401 c 3 Foundation the question is can individual members… read more
socrateaser
socrateaser
1,031 satisfied customers
If you have to paper file a tax return because someone else
If you have to paper file a tax return because someone else has improperly claimed a dependent, is there a special IRS form to use or will a simple attachment suffice?… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I need help with preparing a tax return and I may need to
Hi I need help with preparing a tax return and I may need to file form 3520 as well. Please let me know if you can assist.… read more
taxmanrog
taxmanrog
Master\u0027s Degree
697 satisfied customers
I have a NJ estate tax return to prepare for a decedent in
I have a NJ estate tax return to prepare for a decedent in NJ. The brokerage statement has an account with the decedent and a trustee set up for her grandson under a U/W/O . Are these assets included … read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
717 satisfied customers
I am preparing a corporate tax return. The company is a
I am preparing a corporate tax return. The company is a payroll company based in NJ but almost all of the clients are in NYC. Is the income generated from NY clients require a NY S corporate tax retur… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Sold Mineral interest that are not producing. Inherited it
Sold Mineral interest that are not producing. Inherited it in the 1970's trying to figure out what taxes I owe or where I can place the money to defer some of the tax liability.… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I am preparing a partnership tax return for 2016. The
I am preparing a partnership tax return for 2016. The partnership holds commercial rental property. one of the partners, 50%owner, passed away in April 2016 and left his interest to his spouse. i woul… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
On what schedule of the Pennsylvania Inheritance Tax Return
On what schedule of the Pennsylvania Inheritance Tax Return do I list a piece of real estate where the deed listed the decedent as having a life estate in the property and his brother and daughter as … read more
Anne
Anne
Master Tax Preparer
1,328 satisfied customers
If I prepare an itemized deduction, can I also deduct the
If I prepare an itemized deduction, can I also deduct the standard deduction? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x