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Please elaborate with details. How do circumstances potentially affect your tax return? Is this a Business, or Personal matter?
The IRS allows a deduction for theft and casualty or disaster losses on your tax return. It's not a great deduction. In order to take it the loss must first be bigger than 10% of your income. Whatever amount exceeds that 10% is deductible on your return.
So, to answer your question, you should report check fraud on your tax return if it resulted in a loss for you greater than 10% of your income for the year (after you adjust for any insurance reimbursement).
It gets more complicated than that, too. Here is the IRS article that discusses it.
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