The IRS issued a revenue ruling regarding theft losses. It also issued a Revenue Procedure providing for an optional safe harbor method for claiming theft losses in cases like the Madoff case.
http://www.irs.gov/pub/irs-drop/rp-09-20.pdf
http://www.irs.gov/pub/irs-drop/rr-09-09.pdf
Madoff et atl - New IRS RevRul and RevProc re Theft Losses
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