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(NBC News)   Greedy old person cashes out retirement saving to join a get rich scheme, gets ripped off, and then is shocked, SHOCKED, she has to still pay the tax penalty for clearing out her IRA   ( divider line
    More: Dumbass, Ponzi schemes, IRA, Franchise Tax Board, rate of returns, retirement, United States Department of the Treasury, credit bureaus  
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10858 clicks; posted to Main » on 04 Aug 2013 at 5:40 PM (4 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»

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2013-08-05 01:32:35 AM  
If you rip someone off, that's on you. Yes, they fell for it, but you're the one who did something wrong, you're the one who should bear the consequences. Taking advantage of people doesn't become okay just because you know something they don't or you convince them of a lie.
2013-08-05 01:41:06 AM  
I'm pretty sure that money lost due to fraud, theft, etc is a tax write off so maybe the tax bill won't be as bad as she thought.

/Don't be greedy
2013-08-05 01:53:02 AM  

vpb: I think most of the people who move to Texas are moving there so they can give their money to con-men without having to pay taxes on it.

I mean, you would have to be that bright to WANT to move to Texas right?

What do you do for a living?
2013-08-05 05:37:08 AM  

Relatively Obscure: When she met Maurice Michael McCant in 2007, he presented himself as a successful CEO of Billionaire Catt Entertainment, a rap concert promotion business, and promised to deliver more than 25 percent returns by investing in his company.

That DOES sound legit.

2013-08-05 10:07:00 AM  

atomic-age: You can't scam an honest person.

Less true words have rarely been typed. Honest people are more likely to falsely believe that others are honest.
2013-08-05 11:15:35 AM  
Yo yo yo, let me show you how I'm sustainin'
b.vimeocdn.comView Full Size
2013-08-05 03:10:39 PM  

FormatSlacker: People are inclined to trust other people.  That's how scam artists work.  It's not a matter of her having sat down and crunched the numbers and not been discerning enough.  It was a matter of her disregarding her suspicions because a schemingly charismatic actor made sure to constantly reassure her, play off her better nature and vulnerabilities, and entice her to do something she wouldn't normally do.

As far as being taxed on it, I don't see why she should be, assuming it was all directly lost to the scam.  Taxes are not a punishment meant to befall anyone who dares to touch our sacred green pieces of paper.  The theory is supposed to be "Oh, you have a lot of money, you can certainly afford to spare a portion  to support the society in which you live."  If you got really drunk and won $50 billion from Bill Gates in a bar bet, then immediately lost it back, would it make sense that you leave the bar owing $50 million for the initial transaction, even though you don't have any more money than when you arrived?  If the government doesn't want to risk losing their cut of the IRA withdrawal, they should collect it at the time of withdrawal, or annually from the interest itself.

She should be taxed on it because she didn't pay taxes on it originally. So she wasn't paying taxes on her contributions for years before, and now wants to NEVER pay taxes on them, simply because she fell for a scammer. This isn't about being punitive towards someone who got scammed; it's about her paying her deferred taxes. And you KNOW that you're going to be responsible for those when you withdraw from a traditional IRA...that's the whole point of an IRA.  I don't have a lot of sympathy for someone who was too dumb to even set aside the money she KNEW she would owe in taxes that same year rather than "investing" in a high-risk scheme. I'd have a lot more sympathy if she had lost all of the IRA money in some sort of scam investment WITHIN her IRA (and preventing that is part of why there are rules about what you can invest IRA funds in). I DO have sympathy for her as a scam victim, but I don't really have sympathy for her not setting aside the money she would soon owe in taxes. That's basic money management that she should have known regardless of what she thought she was investing in.

The IRS was already more than generous to her, forgiving a huge portion of the debt, but she wants it ALL forgiven, and I don't support that. Reason: I think there needs to be SOME penalty for greedily risking even the money you need to pay your taxes. Otherwise, you create a huge moral hazard that encourages people to just not care about taking that kind of risk (since if it pays off, they'll be able to pay the taxes, and if it doesn't, they can get them forgiven). I'm fine with them giving her a break, and they did. But she shouldn't get off owing nothing.
2013-08-05 03:12:29 PM  
Also, she should go after the scammer guy and HIS assets in a civil suit rather than expecting the IRS and the state to bail her out. He's the one who has her money, after all.
2013-08-05 09:41:59 PM  
I have all my money in Solera!1  Hope and change baby Hope and change
2013-08-05 10:51:03 PM  

CMYK and PMS: I have all my money in Solera!1  Hope and change baby Hope and change

Ladies and gentlemen: Republican "humor".
2013-08-06 05:22:15 AM  

Pangea: atomic-age: You can't scam an honest person.

Less true words have rarely been typed. Honest people are more likely to falsely believe that others are honest.

"Because I'm dishonest, and a dishonest man you can always trust to be dishonest.  Honestly, it's the honest ones you want to watch out for, because you never know when they're going to do something incredibly...stupid."
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