Victim of a scam: No tax deduction for extraordinary financial hardship
Time and again, the media report on insidious scams in which older people, in particular, are pressured and tricked into making large payments. The shock is immense when it turns out that one has fallen victim to a fraudster. The disappointment is often even greater when the tax office also refuses to allow the resulting loss to be deducted for tax purposes. A recent ruling by the Münster Fiscal Court (ruling of September 2, 2025 – 1 K 360/25 E) now provides further clarity: A financial loss resulting from a scam is not considered an extraordinary burden for tax purposes.
What happened?
In the case in question, a 77-year-old woman received a call from a supposed lawyer. He dramatically explained that her daughter had caused a fatal traffic accident and could be spared pretrial detention by paying bail in the amount of 50,000 euros. Out of concern for her daughter, the elderly woman withdrew the amount from her account and handed it over to a courier.
Shortly thereafter, the call turned out to be a scam—a classic case of the “fake police officer” or “shock call” scheme. Although a criminal complaint was filed, the investigation into the perpetrator was unsuccessful. The victim later claimed the loss of 50,000 euros in her income tax return as an extraordinary burden pursuant to Section 33 of the German Income Tax Act (EStG).
The Münster Fiscal Court rules
The Tax Court dismissed the claim—no tax deduction for the loss. Rationale:
1. Not an extraordinary event within the meaning of the law
The fraud was a general life risk—that is, something that can happen to anyone in principle. It was therefore not extraordinary in the tax sense. Many people would become suspicious in such cases and refuse to pay. The fact that the plaintiff allowed herself to be deceived was tragic, but not relevant for tax purposes.
2. No existential emergency
The elderly woman was financially well-off, received rental income from several properties, and had sufficient liquid assets. The loss therefore did not jeopardize her livelihood. However, extraordinary burdens refer to costs that are unavoidable and significantly impair one’s standard of living—such as medical or long-term care expenses. This was not the case here.
3. Reasonable alternatives existed
The court found that it would have been reasonable for the plaintiff to contact her daughter or the police before making the payment. Pretrial detention—even if it had been imminent—does not pose a threat to life or limb in a system governed by the rule of law. The plaintiff therefore did not act under objective duress, as would be required for tax recognition.
What does this mean for those affected?
As harsh as it sounds: The state does not recognize such losses for tax purposes. Even in cases of fraud and deception, the requirements for tax deductibility as an extraordinary burden are usually not met:
- The event must lie outside the scope of ordinary life.
- It must have been inevitable and unavoidable.
- It must impair economic capacity.
These criteria are interpreted strictly under tax law—and exceptional emotional situations are not automatically taken into account for tax purposes.
Conclusion: Better safe than sorry—and no tax refund in cases of fraud
Older people in particular should be made aware of such scams. Family members, banks, and advisors can help establish appropriate protective measures. Financial relief from the tax office is not to be expected in such cases, as the ruling by the Münster Fiscal Court clearly demonstrates.
For anyone dealing with similar issues or asset transfers—such as in the context of gifts, estate planning, or tax returns—it is advisable to seek expert advice.
Our tax advisors in Düsseldorf and Oberhausen are happy to assist you with questions regarding extraordinary financial burdens, asset losses, gift tax matters, or estate planning. We are also your expert partner in the area of prevention—for example, regarding asset transfers or legal questions about gift tax.
