10 yrs of taxes paid on fraudulent capital gains

My brokerage firm was recently taken over by the SEC for fraudulent stock trading. I paid taxes for 10 years on reported capital gains, which in fact were not actual trades. Not only have I lost my investment, but I have paid taxes on money I did not earn. Can I revise my tax returns for the last 7 years and recover such taxes that I have paid?

Unfortunately, you can only get a refund on the last 3 years taxes. A claim for credit or refund of a tax overpayment paid by return must be filed within the later of (1) three years from the date the return was filed (or due date if filed earlier), or (2) two years from the date the tax was paid (IRC section 6511(a)).

Your recourse for the other years, it to sue the brokerage firm. They are liable to you for any loss caused by their fraud. That includes the tax you mistakenly paid.

Thank you very much for the advice!

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Kent