Level 3

WIRE FRAUD SCAM

Forum|Forum|3 years ago
January 31, 2023
3 replies
16 views

My client was instructed by her employer to wire fund to a brokerage firm to purchase company stock, but a scammer got into the employer computer, changed routing instructions, and the client lost her money in a wire fraud scheme. Bank, employer, and FBI did not think this would be recovered. Would a wire scam fraud like this be a casualty loss in 2022, or are these scams no longer deductible?

This topic has been closed for replies.

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Terry53029

Intuit Community Champion

These type of loses are still deductible if you itemize, and the loss is more than 10% of your AGI + $100.

See link https://www.irs.gov/pub/irs-pdf/i4684.pdf

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TaxGuyBill

Level 15

@Terry53029 Isn't this just a personal Theft Loss? And with no disaster, there is no deduction, right?

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taxprep5268Author

Level 3

Yes, that's what I'm not clear.. I thought these kind of scams (other than Ponzi scams) were no longer deductible as of 2018? Basically, the CEO's company computer was hacked, and the scammer was able to change the wire instructions, sent out the instructions to the client, and she sent the money using a fraudulent wire instructions. She thought she was sending it the company's brokerage account to purchase stock.

sjrcpa

Level 15

Did the business suffer the loss?

Or was it a personal loss?

The more I know the more I don’t know.

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taxprep5268Author

Level 3

No this was a personal loss. The company never received the funds since the scammer was able to change the wire instructions.

qbteachmt

Level 15

If this was done with/on company property, then I would investigate if the business has insurance coverage, such as IT Fraud protection. It's not the same as the employee using their home computer, in other words.

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