Ohio Man Seeks $962,000 From IRS in Dispute Over Cryptocurrency Fraud Loss

On Tuesday, May 12, 2026, Shane E. Vaia filed a complaint against the Internal Revenue Service (IRS) in U.S. District Court for the Southern District of Ohio.

Vaia is seeking approximately $962,000 after the agency denied a tax deduction for an $825,000 loss incurred from a cryptocurrency “pig butchering” scam. The lawsuit also includes a request for a $137,000 refund, along with accrued interest.

The Ohio man’s suit stems from the IRS’s disallowance of his theft loss deduction claim. Vaia alleges he was defrauded in 2024 after being convinced to transfer funds to a platform that appeared to be a legitimate cryptocurrency investment opportunity.

He discovered the scam in May 2024 when he was denied access to his account. Vaia submitted extensive documentation, including transaction records, communications with those involved in the scam, and law enforcement reports, when filing his amended tax return.

Despite this evidence, the IRS denied his refund claim in February. Vaia is now pursuing the theft loss deduction and the refund of federal income tax withholdings through the federal court.

Please contact BlockTribune for access to a copy of this filing.