Crowe Howath Dunedin taxation consulting principal Jarod Chisholm has been working with Inland Revenue to secure a deal which should mean investors were able to claim back tax they paid on fictitious earnings.
Mr Chisholm told the Otago Daily Times when taxpayers were completing the tax returns for those portfolios, they returned them based on the information provided. This was later found to be fraudulent.
''While the information they completed their tax returns on - and paid tax in relation to - was incorrect, the IRD stated no reassessments would occur until the taxpayer had knowledge of what the correct position would be. Of course, this is very difficult when no-one knows this.''
The liquidators now, after 11 months, had clarity on what the portfolio as a whole actually comprised and had outlined the actual investors' share.
It turned out what investors were previously advised ranged from 29.39% at April 2007 1 to 3.67% at April 1 2012 - meaning for every $100 in the report the taxpayer had, only $3.67 was real, Mr Chisholm said.
''The effect of this is that there is now certainty for taxpayers to go back and reassess their tax returns and get tax paid back, at least getting some funds back.''
The IRD letter to RAM liquidator John Fisk, from PricewaterhouseCoopers, said the Commissioner of Inland Revenue acknowledged the unusual and complicated situation involving limited information. The commissioner had attempted to adopt a practical approach while meeting the commissioner's legal obligations.
However, matters covered in the letter should not be seen as setting precedents for non-RAM matters, IRD said.
It was understood many RAM investors had returned taxable income based on March 31 foreign investment values in their portfolio reports, applying the ''foreign investment fund'' 5% ''fair dividend rate'' method.
''As the actual RAM-related investment values determined by the liquidators are lower than the values in the original reports, investors may have their income tax returns amended.''
Mr Chisholm said while the letter talked about only one method, there was sufficient information for taxpayers under other methods to be able to go back, recalculate the position and reassess their returns.
''This is great for taxpayers, as it gives some return back of tax which was historically based on incorrect information.
''There are opinions this is still too harsh for investors. If you have lost all your money, then you have lost all your money. But this gives certainty about tax treatment. For some people, it is a big chunk of money.''
Mr Chisholm had been working with clients who lost everything they had but still had to file returns with IRD knowing the returns were based on fictitious income. The IRD was not keen on people going back to claim tax but the letter to the liquidator ended the uncertainty.
Some clients had invested many hundreds of thousands of dollars into RAM and lost it all, he said. At least now, they would get something back.
On a $100,000 investment, investors would have theoretically earned $5000 and paid $2000 tax, which they could now claim back. On $500,000 they would have paid $8000 to $9000 in tax, Mr Chisholm said.
David Ross, the former head of RAM was sentenced last week to 10 years and 10 months in jail. The 63-year-old's elaborate fraud, spanning 12 years, cost hundreds of investors their life savings and retirement funds.
In total, $115.5 million of investments is estimated to have been lost in the group, which folded last November.
Financial Markets Authority chief executive Sean Hughes said from next year, financial advisers who managed a client's portfolio under an investment authority would no longer be able to hold that money or property themselves.
