Question about taxes....

[Dave D]

[ QUOTE ]
I am a CPA and have dealt with the IRS in this area. They will tell you in no uncertain terms that this is income and no attorney that works in this area will tell you otherwise. Having a transfer held up a week to confirm your identity will not convince the IRS that you do not have full control over the account, especially if you got the money in the end.

I never said that Party was a bank account. I said that Party is an account in which you have a financial interest. The Treasury Department is very clear to include in their examples that it does not mean just bank accounts for reporting.

[/ QUOTE ]

I mean I'm not saying it's not income per se, and he should definatly report it. What I'm curious to know the answer to is basically when do you report it? Do you report whatever the balence of your party account is the day before the next fiscal year? Seems like anything else penalizes you when you could actually lose money during the year.

[fnurt]

[ QUOTE ]
I am a CPA and have dealt with the IRS in this area. They will tell you in no uncertain terms that this is income and no attorney that works in this area will tell you otherwise. Having a transfer held up a week to confirm your identity will not convince the IRS that you do not have full control over the account, especially if you got the money in the end.

I never said that Party was a bank account. I said that Party is an account in which you have a financial interest. The Treasury Department is very clear to include in their examples that it does not mean just bank accounts for reporting.

[/ QUOTE ]

I am a lawyer, but not a tax lawyer. I have read a ton of case law in this area though, because it comes up a lot on 2+2. The bottom line is that it is income; income that may be hard for the IRS to audit, but income nonetheless.

There is a bit of precedent in the other direction, so if you're willing to litigate an expensive case with the IRS, you can take a shot at it. But the bottom line is that if it didn't count as income until you withdrew it, it would be way, way too easy to use this as a method of shifting income from one year to the next. There is no chance the IRS would condone something that could be abused this easily by so many people.

[LethalRose]

[ QUOTE ]
[ QUOTE ]
I am a CPA and have dealt with the IRS in this area. They will tell you in no uncertain terms that this is income and no attorney that works in this area will tell you otherwise. Having a transfer held up a week to confirm your identity will not convince the IRS that you do not have full control over the account, especially if you got the money in the end.

I never said that Party was a bank account. I said that Party is an account in which you have a financial interest. The Treasury Department is very clear to include in their examples that it does not mean just bank accounts for reporting.

[/ QUOTE ]

I am a lawyer, but not a tax lawyer. I have read a ton of case law in this area though, because it comes up a lot on 2+2. The bottom line is that it is income; income that may be hard for the IRS to audit, but income nonetheless.

There is a bit of precedent in the other direction, so if you're willing to litigate an expensive case with the IRS, you can take a shot at it. But the bottom line is that if it didn't count as income until you withdrew it, it would be way, way too easy to use this as a method of shifting income from one year to the next. There is no chance the IRS would condone something that could be abused this easily by so many people.

[/ QUOTE ]

so if its in my account its income and i need to report it?

[rockythecat99]

My brother is a CPA I will ask him more about it and post info as I get it as I see many of use here don't really know what we have to claim and not.

[broiler]

The Treasury Department form is very simple for reporting a foreign account. All you have to do is report where the funds are and the maximum value of the account during the calendar year. The maximum value question just asks you to check a box for the maximum range and the ranges are very wide. The Treasury form is separate from income taxes.

Income is supposed to be based upon sessions. There is no good definition of session, but if you use from sit down on a day until stopping, you won't be too far off. I know there is more to it than that, but I wanted to keep it easy to get the concept.

[fnurt]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
I am a CPA and have dealt with the IRS in this area. They will tell you in no uncertain terms that this is income and no attorney that works in this area will tell you otherwise. Having a transfer held up a week to confirm your identity will not convince the IRS that you do not have full control over the account, especially if you got the money in the end.

I never said that Party was a bank account. I said that Party is an account in which you have a financial interest. The Treasury Department is very clear to include in their examples that it does not mean just bank accounts for reporting.

[/ QUOTE ]

I am a lawyer, but not a tax lawyer. I have read a ton of case law in this area though, because it comes up a lot on 2+2. The bottom line is that it is income; income that may be hard for the IRS to audit, but income nonetheless.

There is a bit of precedent in the other direction, so if you're willing to litigate an expensive case with the IRS, you can take a shot at it. But the bottom line is that if it didn't count as income until you withdrew it, it would be way, way too easy to use this as a method of shifting income from one year to the next. There is no chance the IRS would condone something that could be abused this easily by so many people.

[/ QUOTE ]

so if its in my account its income and i need to report it?

[/ QUOTE ]

If it's in your account because you won it, it's income. If it's in your account because you deposited it there, obviously it's not income.

[Dave D]

[ QUOTE ]
The Treasury Department form is very simple for reporting a foreign account. All you have to do is report where the funds are and the maximum value of the account during the calendar year. The maximum value question just asks you to check a box for the maximum range and the ranges are very wide. The Treasury form is separate from income taxes.

Income is supposed to be based upon sessions. There is no good definition of session, but if you use from sit down on a day until stopping, you won't be too far off. I know there is more to it than that, but I wanted to keep it easy to get the concept.

[/ QUOTE ]

So here's a question I have as far as the theory. If your online poker account is supposed to be treated as an investment, shouldn't the rules be the same as when you invest in the stock market? If that's the case, I thought you only pay taxes on capital gains, ie only when you sell a stock and realize a gain. Similarly, if you sell for a loss, I'm pretty sure you get to deduct this from income right?

Can you tell me why the gov't would look at the two accounts differently?

What about just getting a neteller debit card and never reporting a thing? Sounds pretty sweet to me. Any downside here?

[benneh]

i will never understand why anyone encourages tax evasion.

[Dave D]

[ QUOTE ]
What about just getting a neteller debit card and never reporting a thing? Sounds pretty sweet to me. Any downside here?

[/ QUOTE ]


Yes. unless you keep the cash in a shoebox, as soon as you deposit it into a bank account or other financial vehicle, govt will probably find out, and you get audited.

Additionally, the govt can audit you when you start buying lots of bling bling.