IRS to give Madoff's victims relief on taxes

And it will be sizable. Look at these estimates:

Rough IRS numbers on Madoff's theft alone could total from $7 billion to $10 billion in refunds due to victims, according to accountant tallies.

The IRS rulings are supposed to come out this week.

Before this ruling, it was assumed that these were the options for Madoff investors.

You can have a theft loss deduction, on any amount above the $500,000 SIPC limit, a phantom income deduction, going back three years, and a claim of rights credit for all of your taxes paid on the Madoff ponzi scheme.

Supposedly, the new rulings will encompassing to the Madoff victims.
http://www.time.com/time/business/article/0,8599,1884990,00.html