No it shouldnt, but the report isnt due for four months so Im hoping people indicate how they are doing it as we go. Obviously everyone should be talking to their own CPA as well.

Maybe look up Clonie's lawsuit, perhaps there is an address for TiltWare there?

obg

Russ claiming that the government would ever throw a big penalty and or jail time at someone that didnt do this is such a load of junk that it questions his judgment. If you aren't paying your taxes, then yes, and you'll get what you deserve. But if you are claiming all your winnings, but don't call Absolute Poker a bank, and you get audited, you are really not facing anything serious. It is VERY unclear that you are required to report absolute as a foreign bank account. Their default answer to Russ' inquiries will always be yes, declare, report, etc. There is no precedent for them to claim Absolute should be called that, and if you are making a good faith effort to pay your taxes, you should not let his alarmist statements cause you huge worry.

That being said, I actually am very appreciative of his efforts to inform people here. Having been through an audit, it just feels like he is a bit over-hawkish on how the IRS works. Yes, they want to suck out every penny. But if you are paying your taxes, and making a good faith effort to do it right, they don't try and cripple you and lock you up. The good faith effort thing is actually something they care about and also something they can decide reasonably.

Taking jail out of it, I dont find it hard to believe at all that the IRS would hit you for the $10K for non-willful non-compliance though, it seems like the exact type of situation that they added that penalty in for.

I agree if it is a Swiss bank account. I do not agree if it is an offshore poker site that is hardly a bank and doesn't even have an address. I would agree with you that there is probably a chance (albeit tiny) for the penalty, but likely 0 chance of jail. There are two things they care about. Getting taxes, and avoiding money laundering. If you aren't doing either, that is what is most important with such a gray area issue.

Why take the risk? Just fill the form out and send it in.

hmm, because it may actually be a LOT more risky to do it than not to. If you don't have to do it, and reporting an offshore shadow company is what you'd do, expect a greatly increased chance of audit as your return is guaranteed to get looked at by a human.

I am all for doing it if you either have to (prove to me you have to) or there are no downsides to doing it, but neither is the case. You can pay you taxes in full, and an audit is still a giant pain in the butt. So I would do nothing that is so gray area/optional that will greatly increase chance of audit. I have no problems with you doing it, nor am I advising against it. But it is not official that Absolute or whatever qualifies as an offshore bank. My advice is pay your taxes in full. If you want to report this thing because you think its safer, go for it, but do expect the chances of an audit to go up.

If the IRS decides its a financial institution, its seems like a pretty easy $10K fine to assess though, and according to Russ multiple people have been told its a financial institution. The IRS is a collection agency, if they dont have to prove intent and can assess a fine that you probably wont challenge in court (since its not clear you will win and court fees will eat up a lot of the $10K), I have a hard time believing they wont assess the fine.

i would agree except that there is not a single case of them deciding its a financial institution....poker players have been audited, this has yet to come up (as far as i know)...no one has even claimed they changed anything...all that happened was they responded with the default answer after previously just ignoring. but i do understand your points.

I would much rather deal with an audit than deal with a 100k fine and possible jail time.

I plan on spending the forms out the beginning of June. I want to see how this thread and other threads develop. I play sending an explanation with the form and the emails I received from Fulltilt and PokerStars regarding them not to giving out their exact addresses and exactly where they are keeping the money.

Sounds like someone on here is hiding something from the IRS and is trying to weigh their options on what is more likely to send a red flag.

Additionally, the IRS will take more mercy on someone who is trying to do the right thing and might make some minor mistakes then some one who is trying to cheat the government.

I dont think insideman is saying this because he is hiding stuff from the IRS. I think he's actually saying the same thing as you in your last sentence, he just thinks FBAR requirements would fall under the minor mistake category in your last sentence (which I disagree with)

We got multiple confirmations and we got a confirmation from one of the best gambling accountants in the US. Russ does not gain anything by lying to us. We are lucky we have a resource like Russ posting.

I don't disagree with you, Im filing the forms, I just dont think insideman is trying to commit tax evasion.

I see your point. Personally, I would think the IRS would try to go after people who are avoiding tens of hundreds thousands of dollars instead of someone who might have smaller mistakes that might add up to a couple hundred or a couple thousand (I know this is insideman's point) who was very conscience in completing their taxes. With this in mind, I would still rather have the forms in and have the IRS see that I am trying to do the right thing.

that is a perfectly reasonable point...the main issue was that you are probably much more likely to have the irs looking at you at all when you likely are doing something you don't have to do (within the rules!).

Is the IRS going to audit every single poker who turns this form in? Probably not. Probably a waste of time for them because if you are spending this form in, you are probably a conscience tax payer. Why waste an audit on someone who is paying their taxes.

I didn't make 6 figures last year but I made a nice amount to supplement my income. I didn't file as a pro. I have a log and worked to make sure my taxes were completed correctly. Why would the IRS come after me, unless I was selected for a random audit?

Most audits are completed through the mail. Most of us who would be questioned on this would probably need to send in some paper work. The more you made playing (making 100k plus), the greater the chance of the audit. IRS is going to after -EV audits in most cases where it costs them more for the audit than the money they might receive in back taxes. Don't hold me to this, but I think the audit rate for some making over a million is like 1 in 11.

I am completing the forms for the piece of mind. I don't know what my future holds and if I come into a lot of money, I don't want something like this haunting me. I would think the higher stake professional players would have more to lose by not reporting this than a lower stake player recreational player.

If insideman doesn't want to believe me, that's fine--I don't care. The rule is out there, and not complying with it will be his problem. Interestingly enough, the current issue of California Enrolled Agent Magazine highlights foreign accounts and notes that this is a big issue in current field audits. I urge those who meet the filing requirements to file the form. It's just not worth the risk of prison time and a large fine. Finding out that an individual didn't file the form (when he or she should have) is an easy way for an IRS revenue agent to add $10,000/$100,000 to the result of each audit. If you want to believe that IRS revenue agents aren't judged by their results you're entitled to that opinion, too.

-- Russ Fox

Russ,

I talked to my accountant and we are planning to report the accounts as offshore accounts. He asked me to get the following info.

I sent this to Pokerstars, and got the following response. How do I fill in the blanks?

----------my email to pokerstars

For tax purposes I need the following information on my account with
you.



1. Name of Financial Institution in which account is held.

2. Account number or other designation

3. mailing address of financial institution in which account is held.


---------pokerstars response

PokerStars is owned and operated by a legal entity located in the Isle
Of Man (a crown dependency of the United Kingdom) and we pride ourselves
on abiding by all relevant laws and regulations.

As laws vary around the world, it is the responsibility of the players to
adhere to their own regional laws. Therefore, we are unable to provide our
players with this kind of documentation for a specific country.

Our terms of service make it clear that our services are not for use
in jurisdictions where it is illegal to do so. As you can appreciate
we have players from a vast number of countries around the world and
it would be impossible for us to remain updated as to the legal
situation in every jurisdiction, therefore we encourage our members to
evaluate the local laws which apply to them before they start to use
our services in relation to the "real money" games.

If we can be of further assistance, please let us know.

Regards,

DimitriC
PokerStars Payment Services

I got a similar response. I plan on sending a copy of the email and a letter explaining the accounts I am reporting are online poker accounts and that the sites won't provide any specific information.

If you go to PokerStars' website, their mailing address is right at the bottom. I'm pretty sure it was also published earlier in this thread. That's the information the Treasury is requesting, and it seems pretty easy to complete. (They're also requesting your account number, which for a poker site is your User ID, and the maximum balance during 2008.)

I think you can easily complete the form for Stars.

-- Russ Fox

Agreed Russ, Stars is pretty easy, Im not sure Full Tilt is as easy to fill in with the standard info though

It is amazing how Russ just ignores the problems of Full Tilt or Absolute and says do x, y, and z, even though you have no way of filling out the form accurately.

Took some searching and not sure of accuracy anylonger but for those who need FT info:

Company Owner: Kolyma Corporation, AVV

Website: www.fulltiltpoker.com

Postal Address: Kolyma Corporation
62 Lloyd G. Smith Blvd
Oranjestad, Aruba

Operating Country: Aruba.

Telephone: n/a

Fax: n/a

Contact E-mail: support@FullTiltPoker.com

INFO LINK:
http://www.pokerintensity.com/uk-eur...Tilt-Poker.php

obg

I don't complain about free professional help. Im pretty sure that's not a valid reason to skip the form either.

I don't disagree LetsGambool. But if the IRS tells you to fly, Russ will tell you to just jump off a building. Regardless of whether I agree with the assertion that an online poker site qualifies as an offshore bank (this is not official at all), you can't ignore the actual practical problems faced if you do want to do it for sites that are so secretive and hidden like FT or Absolute which Russ just stays silent about.


btw, OBG: Good research, but I think that is old and not accurate. Also, if you can't actually know the legitimacy of the info you are putting, and pokerintensity.com is your only source, you are doing yourself no favors. Hope that doesn't come off as me attacking you, because I am not. If you are hoping to report an FT account as an offshore account, you do yourself only a service by trying to find the info. But if you can't find confirmed info, it's pretty worthless.