Chicago, IL – March 5, 2013 – Becoming a
victim of a “too good to be true offer” does not necessarily mean that all is
lost. The Better Business Bureau serving Chicago and Northern Illinois (BBB) is
aware that some taxpayers may have experienced losses in certain
investment arrangements discovered to be criminally fraudulent. Often these
investments turn out to be “Ponzi Schemes” where investors lose because there
are no real profits to be had.
The Internal Revenue Service (IRS) has a revenue
procedure that provides an optional safe harbor treatment for taxpayers who
experienced losses in certain investment arrangements discovered to be
criminally fraudulent. It also describes how the IRS will treat a return that
claims a deduction for such a loss but does not use the safe harbor treatment
as described in this revenue procedure. Taxpayers claiming a loss are
instructed to mark "Revenue Procedure 2009-20" at the top of the Form
devastating when someone falls victim to a fraudulent investment scheme,” said
Steve J. Bernas, president & CEO of the Better Business Bureau of Chicago
and Northern Illinois. “It is important to be
proactive before making a decision, but also to make sure that everything in
your power is done to clean up the damage after.”
offers these tips for someone looking for a legitimate investment.
- Don’t invest
with someone just because your friends/colleagues/associates do. There’s no guarantee that
they’ve done their homework about an investment. Furthermore, if the
seller is part of that group, it’s likely everyone trusts this person and
subsequently do not check into their past or their investments.
- Be aware of anyone who claims to be able to bring
back a return above the market rate. This promise of a large return is alluring,
but a red flag that something is not right. Do not trust anyone who claims
to have a different or “special” way of making things happen.
- Find out as much as you can. Investing your hard earned
money is not something you should take lightly. Ask questions and find out
fully where you are putting your money. Be open to references as well
doing your own research. Check out Business Reviews
with the Better Business Bureau.
- Get as much information as possible in writing. Be sure to get details of
the offer, names of validating organizations, the organization's own
research documentation, and copies of any contracts you will be asked to
- Consult an unbiased third
party. Look for an unconnected broker or licensed
financial advisor before investing, research the advisor or broker through
business reviews at www.bbb.org
For additional consumer safety tips, visit www.bbb.org
As a private, non-profit organization, the purpose
of the Better Business Bureau is to promote an ethical marketplace. BBBs help
resolve buyer/seller complaints by means of conciliation, mediation and
arbitration. BBBs also review advertising claims, online business practices and
charitable organizations. BBBs develop and issue reports on businesses and
nonprofit organizations and encourage people to check out a company or charity
before making a purchase or donation.