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IRS In The Can For Madoff?

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Probably not, though they are offering incentives for investors who promise not to sue Ponzi-Boy, which seems rather neighborly of them. Per the NYDN:

The IRS is set to announce today that it's giving Bernie Madoff's victims a bigger break on the losses they suffered in the $65 billion scheme.
We hear that in a hearing this morning called by Sen. Chuck Schumer, among others, IRS Commissioner Doug Shulman is expected to announce that the taxman will let Madoff's victims take a 95% theft loss deduction, going back five years.
The deduction will allow people to claim "phantom profits" as losses -- not just the investments they put in -- helping them recover the taxes they paid on those non-existent earnings. And those deductions will be allowed to carry forward for 20 years, giving victims plenty of time to get some money back.
Folks who sue Madoff will have to settle for 75% of what they invested.