Washington, D.C. – Today, Congressmen Darin LaHood (IL-16) and Don Beyer (VA-08) introduced the Federal Receivership Fairness Act. This bipartisan bill will expedite IRS procedures to ensure victims of Ponzi Schemes and other fraud receive compensation in a timely manner.
“Victims of fraud should not be forced to wait through a multi-year bureaucratic process before receiving compensation,” said Rep. LaHood. “The bipartisan Federal Receivership Fairness Act will cut through red tape at the IRS to ensure receivership proceedings move quickly and victims are made whole. I’m grateful to Congressman Beyer for joining me in introducing this commonsense bill.”
“This legislation would provide desperately needed relief for victims of fraud who often must wait years to receive the compensation they are entitled to for no good reason,” said Rep. Beyer. “The Federal Receivership Fairness Act would establish an orderly and efficient process to expedite the distribution of funds and help get victims back onto their feet. I appreciate Rep. LaHood’s leadership on this bill and look forward to working together to see it passed into law.”
"The National Association of Federal Equity Receivers (NAFER) strongly supports this long-overdue legislation that protects fraud victims from being harmed twice by establishing a fair and expedited court process to prevent lengthy IRS delays from blocking timely distribution of funds in receivership proceedings," said Kathy Bazoian Phelps, President of NAFER.
Background:
- Receivers are court-appointed agents who are given legal control over properties and businesses, often in cases of fraud or other financial mismanagement.
- When these cases occur, receivers are responsible for selling assets to compensate victims and creditors.
- Receiverships are also required to pay outstanding taxes owed to the federal government – unfortunately, it can take several years for the IRS to determine what is actually owed.
- This differs from bankruptcy proceedings, where the IRS is required to determine tax liability within just 180 days.
The Federal Receivership Fairness Act will correct this bureaucratic unfairness by requiring the IRS to determine receivership tax liability within 180 days – ensuring victims of fraud can receive compensation as quickly as possible.
The legislation is supported by the National Association of Federal Equity Receivers (NAFER), the National Association of Bankruptcy Trustees (NABT), the Turnaround Management Association (TMA), and the Public Investors Advocate Bar Association (PIABA)
Read the full text of the legislation HERE.
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