Tax Ramifications for Scam Victims - 0.2 Nano CPE

Financial Scams Don’t Just Steal Money — They Trigger Serious Tax Consequences.

Modern scams—investment frauds, impersonation schemes, AI voice-cloning extortion, and other rapidly evolving fraud tactics—are exploding in frequency and sophistication. For victims, the financial loss is devastating. But for tax professionals, the real emergency comes next: determining whether the loss is deductible, navigating retirement distribution rules, and helping clients avoid irreversible tax fallout.

This course gives you the clarity and framework you need to evaluate scam-related losses, identify when IRC §165(c)(2) applies, and mitigate the tax damage caused by fraudulent withdrawals.

Learning Objective

Identify when scam-related losses are deductible and understand the tax impact of scam-induced retirement withdrawals.

Course Description

This 13-minute nano-learning course explains how the IRS treats losses from modern financial scams and when those losses may qualify as deductible under IRC §165(c)(2). Participants learn how to assess taxpayer intent, document profit-motive claims, and navigate the tax consequences of scam-related retirement account withdrawals. The course also covers how the 60-day rollover rule can help mitigate taxable distributions.

Who This Is For

Professionals advising clients who have experienced financial scams
Practitioners navigating casualty and theft loss deductibility
Tax pros who want clarity on retirement distribution rules and rollover options

Why It Matters

Financial scams don’t just drain a client’s money—they can create major tax consequences.

Without proper guidance, victims may face taxable distributions, early withdrawal penalties, and nondeductible losses. With a clear framework, practitioners can quickly assess deductibility, document client intent, and help clients avoid unnecessary tax burdens while supporting a smoother financial recovery.

Author / Instructor

Lee T. Reams, Sr., EA

Lee T. Reams, Sr. is an owner and Editor-in-Chief of CountingWorks, where he develops tax education content, edits the Big Book of Taxes, and speaks for the CountingWorks Seminar Series. He is a long-time practitioner and industry leader with extensive experience in tax education, practice management systems, and professional standards.

Course Details

This course qualifies for NASBA continuing professional education credit. CountingWorks, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website at nasbaregistry.org.

Protect Your Clients From a Second Financial Hit — Starting Today

Start Tax Ramifications for Scam Victims and learn how to guide clients through the tax consequences of fraud with clarity, confidence, and compliance.

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