practically, I don't see the issue - but hopefully others will weigh in.
in 2022, you received revenue from clients and turned around and paid sub-contractors. The profit is taxable. No problems here.
but the checks to the sub-contractors were stolen and cashed. So you issued another set of checks which the sub-contractors cashed.
If you had a reasonable expectation of getting reimbursed for the stolen checks from the Bank that is simply a receivable. That receivable was zeroed out by the Banks in 2023.
where is the loss??????
