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I had a client today who asked if he had to report or disclose his holdings in a foreign country where such holdings are his on-line gambling account.
Anyone have an answer--with specifics.
He is concerned that it is no different than having gold in Switzerland or similar holdings that must be disclosed to the IRS.
Redietz----I assume you have foreign on-line bookies. Have you ever considered this or had to deal with it?
Anyone?
I found this on the IRS.gov website concerning winnings, that they must be reported:
Offshore Wagering
Over the last few years, gambling websites have proliferated on the Internet. Many of these virtual casinos are organized and operated from offshore locations, where the operators feel free from State and Federal interference. The operators of these activities may suggest players in the U.S. are not subject to tax on their winnings, and may handle collections and disbursements in ways designed to facilitate avoidance of U.S. taxes.
I did find on the IRS.gov site information about a minimum threshold for reporting these foreign accounts:
If the total value is at or below $50,000 at the end of the tax year, there is no reporting requirement for the year, unless the total value was more than $75,000 at any time during the tax year
I’m not sure what your professional title is that you have a client, but your credibility certainly comes into check here.
I could only imagine any client running into issues down the road only to find out your actions taken were based on information from an anonymous gambling forum.
You must be real lazy, or just one of the smarter guys on these forums
Offshore books do not report anything about their clients to the IRS.
Black--if you are trying to start a verbal fight with me you picked the wrong guy because, after this response, that will be the end of the discussion for me. There will be no 10 pages of nonsense to follow. I try not to waste my time in that manner.Quote:
Originally Posted by blackhole
As to the bigger issue, you can spend hours reading the international banking rules and regulations and the IRS rules on foreign holdings and their reporting requirements. After doing that, you will probably shake your head and go "what the eff are they trying to say". Knowing that, and having already read the rules and regs years ago, I reached out to this forum which does have some people who may have some knowledge or experience in this matter. Not everyone here is arguing about Rob's wife and his tax deductions. It was also a friendly warning/reminder to Redietz to make sure he has not run afoul of these laws if they in fact pertain to offshore bookies.
Would Google make you more comfortable than an anonymous gambling forum? How about Wikipedia?
And yes--I am both lazy and smart---lazy enough and smart enough not to waste a lot of time for a client that I know hates to pay.
Mickey/Alan---thank you. However, what he is concerned about here is not his winnings but the actual holdings in the foreign country that may be subject to the disclosure/reporting rules.
If you are curious, you can look at IRS Form 8938 and its instructions.
According to what Alan found, the "legal" requirement is to report your balance in the offshore account if your balance is $50k or more at the end of the year, or if it breaks $75k at any time during the year.
However, two things to consider:
1) There is zero chance the IRS will know your balance on these sites, as they do not report to the IRS. Even if there is some kind of bust and the IRS gets access to their records, they would be unlikely to go after those who had an unreported balance. They tend to only be interested in those who withdraw to their US bank accounts and then subsequently don't report the income on that year's taxes.
2) Given all the scams/scandals in the past 15 years with unlicensed, foreign gambling sites, it is a reasonable assumption that the money shown in your balance isn't "yours" until you actually withdraw it. I liken it to a drug dealer who buys $1 million worth of drugs from you, and "promises" to pay you next week. It isn't really income until he shows up with the actual suitcase full of cash to pay you. Your balance on these sites is more of an IOU. There is no proof nor even a promise that they are actually holding your money anywhere. In many cases, they are not holding the money of all total balances, and just keep enough around to pay the withdrawers (and often not even that, thus the long waits for payouts on some sites!)
I'm not a tax attorney, but my general advice is to tell your friend not to worry about it.
As long as he pays taxes on the money he actually withdraws, the IRS should be happy with that, and in fact won't have access to see what his balances are/were anyway.
The penalties can be severe for non-compliance, but I pretty much took the exact position that you stated above Dan.
On a separate note but related to your #2 above, the court recently ruled that advance deposit accounts with legal on line wagering companies in the U.S. do not belong to the account holder and are not protected if the wagering company files bankruptcy. This is a big concern. I tend to leave a substantial balance from time to time as I am a high volume player. There are usually limits on how often you can withdraw funds, or at least how often it is free of charge. I may have to spread my action a little more but that has intrinsic cost in the loss of rebates.
I personally consider my two offshore gambling sites to be offshore bank accounts. It's to protect myself against snitches like Rob "Singer" Argentino." He is a snitch.
I know you're likely not being serious here, but this brings me to another point.Quote:
Originally Posted by mickeycrimm
The IRS generally ignores "snitches" unless they have concrete evidence of their accusation.
This is because many people attempt to use the IRS as a form of revenge against enemies, former friends, former lovers, etc.
For example, let's say I dated a girl named Jane, and it ended badly.
Knowing I'm a poker player and in an industry where a lot of income is self-reported, Jane figures she can get revenge upon me by reporting me to the IRS for tax evasion, despite the fact that she has no evidence or proof that I've committed that crime.
So Jane writes a letter to the IRS saying, "I dated Dan Druff for 9 months, and he told me several times that he doesn't report all of his poker winnings! Look into him, and you will see I'm correct!"
The IRS will typically ignore such a letter.
Why?
Because they know that these hearsay allegations are frequently submitted as "throw against the wall and see what sticks" type accusations against enemies.
In the above case, Jane figures that if her guess about me was correct, the IRS will bust me and she will get satisfaction (and perhaps a reward).
And if her guess about me was incorrect, it's no skin off her ass, since she won't be the one spendng resources on the investigation!
Therefore, Jane has everything to gain and nothing to lose by making this baseless accusation.
The IRS will not waste its time on things like this. They want to see real proof accompanying any accusations, or they tend to ignore them.
There is an actual IRS snitch form. https://www.irs.gov/pub/irs-pdf/f211.pdf
It's not as simple as sending in a letter or making a phone call. They want detailed proof.
Rob "the snitch" Argentino has had his ex son-in-law, who works for the IRS, on my tail for a lot of years now. Robert Harry Argentino is a thoroughly disgusting person and doesn't deserve to have one friend on this planet.
Do you have any direct evidence of this? If it's more than "just a feeling", you can file a complaint against an abusive agent by submitting Section 1203 Allegation Referral Form, it's available online. You can also drop a letter toQuote:
Originally Posted by mickeycrimm
Commissioner's Complaint-Processing Analysis Group
Room #5579
1111 Constitution Ave., N.W.
Washington, D.C. 20224
James, thanks for the information. Rob made veiled threats to me about his son-in-law, I don't remember exactly when, maybe 4 or five years ago. He also said some things that only the IRS would know about me. How did Rob get that information? So I know he has been using his son-in-law. And I suspect that I'm not the only one in the gambling forums that Rob has snooped around on.Quote:
Originally Posted by james40
I've been in the IT field for a long time, the amount of personal information out there is amazing. County websites are the most fertile for information. If you know where to look, and you are fairly diligent in your search, you can uncover pretty much anything you want to know about a person. I'm sure he would have liked to have kept his bankruptcy information private, but it's public information, as is him name/address/phone number etc. I would not worry too much about it, he's an old troll with a lot of time to spend on the internet and I'm it's more shit stirring.Quote:
Originally Posted by mickeycrimm