How file crypto scam loss in casualty and theft loss using Form 4684, Section B

[DianeW777]

The Ponzi Scheme section of Form 4684 is not available in TurboTax.  TurboTax does not support tax losses from investment fraud. We recommend consulting a tax professional if you've experienced this situation. This would be Section C, form 4684.

• IRS Form 4684

The IRS provides two items of guidance to help taxpayers who are victims of losses from Ponzi-type investment schemes.

• Revenue Ruling 2009-9 provides guidance on determining the amount and timing of losses from these schemes, which is difficult and dependent on the prospect of recovering the lost money (which may not become known for several years).
   
• Revenue Procedure 2009-20 simplifies compliance for taxpayers by providing a safe-harbor means of determining the year in  which the loss is deemed to occur and a simplified means of computing the amount of the loss.
  • FAQs Related to Ponzi Scenarios for Claw back Treatment

[bgorg76]

Intuit needs to provide additional data input ports to allow user to fill out  Section C. The current program is forcing the user to go to Section B.  The program states that you should not provide a name description in Section B when you opted to go to Section C.  Can't file electronically if you selected to Section C.  The alternative option is to send forms to the IRS!

[thetates123]

I'm having this same issue. How were you able to solve? Did you end up having to mail them? 

[DaveF1006]

If you are dealing with a Ponzi scheme loss, TurboTax is not the right choice. Because of the "phantom income" adjustments and the strict IRS safe harbor rules, this is one of the few times where the cost of a CPA or Tax Attorney is almost always worth it to ensure you actually get the deduction without an audit.

With the likelihood of a high audit risk, TurboTax gives very limited support for this because it is speculative and potentially perilous to your finances.