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Poker Legislation & PPA Discussion hosted by Rich Muny Discussions of various poker-related laws and steps players can take to push for better laws.

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Old 03-05-2009, 01:16 PM   #26
JAque
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Re: Reporting Poker Sites as Foreign Accounts Catch All

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Originally Posted by blinkman View Post
Should we report poker sites balance as part of FBAR for 2006 and 2007 as well or should we start doing it only from tax year 2008 onwards..

does anyone have any perspectives on this.
Keep in mind that US citizens had access to Neteller a few years ago. This was clear a financial institution. Therefore, there are implication in declaring those accounts as well for US citizens. Players should consult a lawyer on reporting previous years accounts at Poker sites or Neteller or any offshore account.

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Old 03-05-2009, 03:04 PM   #27
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Re: Reporting Poker Sites as Foreign Accounts Catch All

I went through a very lengthy and expensive audit last year. I was audited for 05-07 and they never mentioned neteller or foreign accounts other than asking if i had any foreign bank accounts. Fairly certain my accountant never checked off neteller as foreign account or whatever those years yet over 8 months the auditor mentioned nothing of the sort. I already contacted my accountant and making the change for this year after reading this thread just to be sure I avoid any future headaches.
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Old 03-05-2009, 03:37 PM   #28
codewizard
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Re: Reporting Poker Sites as Foreign Accounts Catch All

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Originally Posted by LetsGambool View Post
I thought that since poker sites are unequivocally foreign bank accounts this year and there seems to be a lot of confusion with how to report the accounts (including sites refusing to give the needed information), a specific thread for information gleaned on how to properly file this report would be useful.

Hopefully Russ and other CPA's can chime in with their thoughts.
Assuming CPAs understand taxes is like saying everyone at your table is Phil Ivey or Annie Duke or ... you get the point.

Second, the reporting for foreign accounts is OVER $10,000.

Also, it is quite common for the IRS to just say "yes report" for no other reasons than they are taught to say that. I am surprised that he was not told this sooner. Then again, he may have been talking to people who didn't understand his question. Yes, it's quite common for the IRS to NOT understand the tax code.

I for one do not believe (and advise my clients likewise) that poker accounts are NOT bank accounts. They have none of the determining features that a "signatory" account has.

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What is a financial account?
A “financial account” includes any bank, securities, securities derivatives or other financial instruments accounts. The term includes any savings, demand, checking, deposit, or any other account maintained with a financial institution or other person engaged in the business of a financial institution. Individual bonds, notes, or stock certificates held by the filer are not a financial account nor is an unsecured loan to a foreign trade or business that is not a financial institution.
I have yet to receive my checkbook or passbook for FTP or UB or PS, etc...

Last edited by codewizard; 03-05-2009 at 03:50 PM.
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Old 03-05-2009, 04:36 PM   #29
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Re: Reporting Poker Sites as Foreign Accounts Catch All

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Originally Posted by codewizard View Post
Assuming CPAs understand taxes is like saying everyone at your table is Phil Ivey or Annie Duke or ... you get the point.

Second, the reporting for foreign accounts is OVER $10,000.

Also, it is quite common for the IRS to just say "yes report" for no other reasons than they are taught to say that. I am surprised that he was not told this sooner. Then again, he may have been talking to people who didn't understand his question. Yes, it's quite common for the IRS to NOT understand the tax code.

I for one do not believe (and advise my clients likewise) that poker accounts are NOT bank accounts. They have none of the determining features that a "signatory" account has.



I have yet to receive my checkbook or passbook for FTP or UB or PS, etc...

Please elaborate on exactly how you define the portion I bolded.
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Old 03-05-2009, 05:49 PM   #30
Robin Foolz
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Re: Reporting Poker Sites as Foreign Accounts Catch All

pm
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Old 03-05-2009, 06:20 PM   #31
LetsGambool
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Re: Reporting Poker Sites as Foreign Accounts Catch All

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Originally Posted by codewizard View Post
Assuming CPAs understand taxes is like saying everyone at your table is Phil Ivey or Annie Duke or ... you get the point.

Second, the reporting for foreign accounts is OVER $10,000.

Also, it is quite common for the IRS to just say "yes report" for no other reasons than they are taught to say that. I am surprised that he was not told this sooner. Then again, he may have been talking to people who didn't understand his question. Yes, it's quite common for the IRS to NOT understand the tax code.

I for one do not believe (and advise my clients likewise) that poker accounts are NOT bank accounts. They have none of the determining features that a "signatory" account has.



I have yet to receive my checkbook or passbook for FTP or UB or PS, etc...
Land-based casinos do count though, correct?

I see your point, but geez you are betting a lot on being right.
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Old 03-05-2009, 09:48 PM   #32
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Re: Reporting Poker Sites as Foreign Accounts Catch All

http://www.taxabletalk.com/archives/..._2007_02.shtml

-----> Neteller, the DOJ, and the IRS


"First, Neteller is considered to be a foreign financial institution. If you have a foreign bank account, and have $10,000 or more in a foreign bank account(s) at any one time, you are required to file Form TD F 90-22.1 by June 30th of the following year with the Department of the Treasury and check the box at the bottom of Schedule B. If you have a foreign bank account and don't declare it, you can face civil and/or criminal penalties. Anyone who received $10,000 or more in one transaction from Neteller had a foreign bank account. I expect the Treasury Department to check their records and come after those who didn't declare their Neteller account. A few individuals may even face criminal prosecution over this, if they had extremely large transactions from Neteller."

Related Posts (bottom of page of link above)


3. Neteller and Constructive Receipt
4. More on Neteller
5. Neteller, the DOJ, and the IRS


*****************
****************

Form TD F 90-22.1

Who Must Use This Form?

This is a brief one page form that is used to disclose the identity of and location of any foreign financial accounts with a balance (for all accounts combined) of more than $10,000 at any time during the prior calendar year.


When Is It Due?

This form is due on June 30th of the year following the taxable year of the taxpayer. There is no procedure available for an extension and an extension of time to file a personal or corporate tax return does not affect the filing date for this form.



Why Comply filling Form TD F 90-22.1 ? (Penalties) to

According to the instructions to the form, "Civil and criminal penalties, including in certain circumstances a fine of not more than $500,000 and imprisonment of not more than five years, are provided for failure to file a report, supply information, and for filing a false or fraudulent report". (31 CFR 103) However, these extreme penalties have rarely been imposed due to the time and cost of proving willfulness. In the American Jobs Creation Act of 2004, the Congress added a new penalty of up to $10,000 for a non-willfull failure to file this form. That penalty can be waived at the discretion of the IRS for reasonable cause, but the law and instructions are silent as to whether the penalty can be imposed for filing the report after the due date.










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Old 03-05-2009, 11:06 PM   #33
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Re: Reporting Poker Sites as Foreign Accounts Catch All

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Originally Posted by reztes757 View Post
I went through a very lengthy and expensive audit last year. I was audited for 05-07 and they never mentioned neteller or foreign accounts other than asking if i had any foreign bank accounts. Fairly certain my accountant never checked off neteller as foreign account or whatever those years yet over 8 months the auditor mentioned nothing of the sort. I already contacted my accountant and making the change for this year after reading this thread just to be sure I avoid any future headaches.
Can you give everyone a trip report of your audit process? i think it'd be enlightening to many..

As for the Wizard posts, he has a point...it makes 100% sense that the default answer they would give on whether to report a site would be yes, regardless of whether you actually should...so russ fox claiming that just because some tiny sheep in the cog said yes is some sort of legal proof is a bit of crap...its also a bit ridiculous that just because Russ got a random answer this year in a personal question, that everything has changed...i am sure many could write in and still get no answer this year..

that being said, hypothetically, if reporting the fbar doesnt increase audit risk, there is actually very little downside to doing it...so i'd just do it...the issue is whether it can be done in a reasonable way for such a shady and shadow company like FT...good luck providing any legit details..
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Old 03-06-2009, 12:08 AM   #34
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Re: Reporting Poker Sites as Foreign Accounts Catch All

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Originally Posted by insidemanpoker View Post
Can you give everyone a trip report of your audit process? i think it'd be enlightening to many..

As for the Wizard posts, he has a point...it makes 100% sense that the default answer they would give on whether to report a site would be yes, regardless of whether you actually should...so russ fox claiming that just because some tiny sheep in the cog said yes is some sort of legal proof is a bit of crap...its also a bit ridiculous that just because Russ got a random answer this year in a personal question, that everything has changed...i am sure many could write in and still get no answer this year..

that being said, hypothetically, if reporting the fbar doesnt increase audit risk, there is actually very little downside to doing it...so i'd just do it...the issue is whether it can be done in a reasonable way for such a shady and shadow company like FT...good luck providing any legit details..
If my choices are to believe a random idiotic anonymous idiot poster or Russ Fox please understand why I will choose Mr. Fox over your incoherent rant.
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Old 03-06-2009, 12:26 AM   #35
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Re: Reporting Poker Sites as Foreign Accounts Catch All

I suggest anyone who wants to verify the IRS/Dept of the Treasury's position do one of two things:

(a) You can email the IRS/Treasury group that handles this. It's not a random IRS person who gave me this answer. I know that some of my clients did just that and got the same answer as I did; or

(b) Just not file the form and risk a $100,000 minimum penalty for willful noncompliance. Sure, the odds are that you won't get that penalty but do you want to be the one test case? My clients won't be.

Also, remember that you have to add the maximum balance of each foreign financial account during 2008, and compare that to $10,000. If that total is equal to or greater, you must report all of your foreign financial accounts that have even $1 in them at any time during 2008.

As to why online gambling accounts are considered by the IRS foreign financial accounts, you need to remember that casinos in the US fall under many of the same regulations as banks. Additionally, many of the online casinos (and poker rooms) offered e-checks, and took money directly from players' bank accounts. Unfortunately, the IRS/Treasury position is both logical, and likely correct.

-- Russ Fox
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Old 03-06-2009, 01:53 AM   #36
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Re: Reporting Poker Sites as Foreign Accounts Catch All

How is this news, or NEW for that matter.

Are U.S. citizens not suppose to report EVERY dollar they earn?
Why did this even need to be asked of the IRS?

Do me a favor Russ could you contact the IRS and ask them if your suppose to report $10k cash stuffed under your mattress?? FFS! Common sense pple....
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Old 03-06-2009, 03:44 AM   #37
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Re: Reporting Poker Sites as Foreign Accounts Catch All

Sooooo, those who choose not to report their $10k+ would do so only because they are under-reporting their income.
Why else?
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Old 03-06-2009, 09:15 AM   #38
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Re: Reporting Poker Sites as Foreign Accounts Catch All

Why else? Because it's a huge hassle.
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Old 03-06-2009, 12:02 PM   #39
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Re: Reporting Poker Sites as Foreign Accounts Catch All

I'd say not only is it a huge hassle, but both jimbo and Russ seem unable to explain how to do it for a site like Full Tilt.
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Old 03-06-2009, 12:32 PM   #40
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Re: Reporting Poker Sites as Foreign Accounts Catch All

If anyone has info about how they have filled it out for Full Tilt and can post it, that would be great.
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Old 03-06-2009, 01:03 PM   #41
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Re: Reporting Poker Sites as Foreign Accounts Catch All

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I'd say not only is it a huge hassle, but both jimbo and Russ seem unable to explain how to do it for a site like Full Tilt.
Unwilling in my case, to a bunch of random net posters anyway, especially the rude kids here.
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Old 03-06-2009, 01:07 PM   #42
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Re: Reporting Poker Sites as Foreign Accounts Catch All

because it costs you so much. you sound like a 5 yr old child who wants to feel special by not letting others into his tree house. it is quite refreshing that russ, unlike you, acts mature.
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Old 03-06-2009, 03:31 PM   #43
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Re: Reporting Poker Sites as Foreign Accounts Catch All

I want to follow the tax law as closely as possible but since I did not report this form by the deadline(which by my understanding due this past summer) am I better off not reporting these accounts since I'd be admitting to "unwillfully declaring it." It'd be my guess that 98% of poker players do not file this form and given the ambiguity of it and the fact that my accountant seems adamant about not having to declare it I'm not too worried about it.
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Old 03-06-2009, 05:15 PM   #44
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Re: Reporting Poker Sites as Foreign Accounts Catch All

An interesting webpage
http://tax.aicpa.org/Resources/Inter...quirements.htm

A real question here is does the FBAR increase your risk of audit? There are plenty of people who were borderline 10k in one of their online poker accounts and probably didn't even make that much from them. Are these individuals' odds of audit higher if they file the FBAR? Over an insignificant amount of money?
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Old 03-06-2009, 06:56 PM   #45
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Re: Reporting Poker Sites as Foreign Accounts Catch All

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because it costs you so much. you sound like a 5 yr old child who wants to feel special by not letting others into his tree house. it is quite refreshing that russ, unlike you, acts mature.
Russ is able and qualified to offer professional advice, I am not. Since you stated I was unable to offer the advice in the first place I don't see why it should really matter to you.
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Old 03-06-2009, 10:15 PM   #46
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Re: Reporting Poker Sites as Foreign Accounts Catch All

Why do people have to go and stir up Jimbo?

Time to get some popcorn and frosty beverage.... here we go
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Old 03-06-2009, 11:55 PM   #47
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Re: Reporting Poker Sites as Foreign Accounts Catch All

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I want to follow the tax law as closely as possible but since I did not report this form by the deadline(which by my understanding due this past summer) am I better off not reporting these accounts since I'd be admitting to "unwillfully declaring it." It'd be my guess that 98% of poker players do not file this form and given the ambiguity of it and the fact that my accountant seems adamant about not having to declare it I'm not too worried about it.
i think your situation is common. it'd be great if russ did address how specifically to handle this kind of situation as well as the craziness that would be trying to declare an unregulated, address free, shadow company like FT.
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Old 03-07-2009, 01:03 PM   #48
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Re: Reporting Poker Sites as Foreign Accounts Catch All

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i think your situation is common. it'd be great if russ did address how specifically to handle this kind of situation as well as the craziness that would be trying to declare an unregulated, address free, shadow company like FT.
The problem is, Russ can't really give the perfect way to handle it, because the IRS itself probably doesn't even know.

Congress has no clue. They still operate under the assumption that online poker is perpetual -EV gambling like all the casino games that are against the house. Some congresspeople probably don't even realize texas hold'em and omaha aren't played against a "house."

Now that was just Congress I was talking about. The tax code is light years behind that.

IMO, in a situation like this where nobody knows what the F is really going on, I think the only thing you can do is use common sense and just don't give the IRS any ammo by "willfully evading."
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Old 03-07-2009, 08:35 PM   #49
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Re: Reporting Poker Sites as Foreign Accounts Catch All

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The problem is, Russ can't really give the perfect way to handle it, because the IRS itself probably doesn't even know.

Congress has no clue. They still operate under the assumption that online poker is perpetual -EV gambling like all the casino games that are against the house. Some congresspeople probably don't even realize texas hold'em and omaha aren't played against a "house."

Now that was just Congress I was talking about. The tax code is light years behind that.

IMO, in a situation like this where nobody knows what the F is really going on, I think the only thing you can do is use common sense and just don't give the IRS any ammo by "willfully evading."
thank you.
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Old 03-08-2009, 12:56 PM   #50
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Re: Reporting Poker Sites as Foreign Accounts Catch All

this thread really shouldnt go silent until someone explains what they would do specifically for a site like FT.
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