Blockchain forensics and fraud investigation firm Lionsgate Intelligence Network has launched a free Section 165 calculator and evidence service for victims of crypto scams and investment-related fraud, including fake investment platforms, wire fraud, and brokerage account compromises.
According to the Global Anti-Scam Alliance, consumers lost more than $1 trillion to scams in 2024. Even when funds cannot be recovered, eligible investment fraud losses may qualify for tax relief under Section 165 of the Internal Revenue Code, Lionsgate says.
The calculator estimates a potential deduction’s tax impact. Clients who proceed receive a CPA-ready package documenting the loss, transaction purpose, alleged theft, and recovery prospects.
For taxpayers filing on extension, Oct. 15 is the deadline to report a theft loss on Form 4684, Casualties and Thefts, for its discovery year, provided no reasonable prospect of recovery remains.
The service follows IRS Chief Counsel Memorandum 202511015, released March 14, 2025, which explains that losses may qualify when the conduct is theft under state law, the transaction was entered into for profit, and no reasonable prospect of recovery remains.
Section 165 isn’t limited to cryptocurrency: qualifying losses may involve U.S. dollars or other property transferred by wire, brokerage account, payment app, or another channel.
“At Lionsgate, we support individuals and companies targeted by crypto scams and other investment-related fraud, as well as the CPAs helping them navigate the aftermath,” Bezalel “Eithan” Raviv, founder and CEO of Lionsgate Intelligence Network, said in a statement on Sept. 22. “We investigate what happened, organize transaction records, document recovery efforts, and assess whether recovery remains reasonably possible. This provides victims with a clear, evidence-based path forward and gives CPAs the factual foundation they need to independently evaluate a potential Section 165 theft-loss tax deduction.”
The service provides a financial investigation that may fall outside a CPA firm’s traditional tax-preparation work. Users complete a questionnaire covering the scam, assets transferred, transaction purpose, and recovery efforts, the company says. Lionsgate organizes transaction histories, communications, account records, and forensic findings. Crypto cases can include blockchain tracing; wire-transfer and brokerage cases use corresponding financial records.
The package gives the tax professional a documented factual record for independently evaluating Section 165 eligibility and preparing the return. The free calculator creates no obligation to purchase services, Lionsgate says.
More information about Lionsgate Intelligence Network can be found here.
Photo credit: Lionsgate Intelligence Network/LinkedIn
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