Update on Madoff fraud victim tax relief..

We reported posted an article on the 17th of April about the IRS allowing the victims of the fraud losses to gain certain tax benefits.

Here's the link for those who missed it...

http://austaxation.blogspot.com/2009/04/irs-says-we-can-to-madoff-stanford.html

An update on the situation in the USA...

Despite the US IRS Federal tax ruling, it seems that the state government agencies are refusing to allow the same rules to apply to state income taxes.

Specifically, the California Franchise Tax Board is refusing to co-operate. 

The group of victims affected by this refusal amounts to around 10% of the US$65 billion fraud. They are currently lobbying the state governments for tax relief.

RECAP FROM AUSTRALIAN PERSPECTIVE

We have to keep in mind that the USA runs on a complicated multiple-tiered tax system. In some places, there are federal, state and municipal (what we call "local council") income taxes.

In Australia, we have only a federal level income tax system. This includes the Goods & Services Tax (GST) which was introduced in 2000 to replace the various State and Territory taxes, duties and levies.

From the AusTax team. 

The #1 provider of Australian tax news on twitter.