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IRS Says USA Gambling Accounts Must Be Reported
Friday June 20,2014 : US FEDERAL COURT RULES THAT ONLINE GAMBLING ACCOUNTS MUST BE REPORTED
Foreign Bank and Financial Accounts Report required on internet gambling account holdings of over $10,000.
A US federal court has ruled that amounts of over $10,000 held by US citizens in internet banking or gambling accounts must be declared to the tax authorities.
The ruling was on a case where a US gambler operated internet accounts with PokerStars.com and PartyPoker.com, funding them through FirePay and Western Union transactions.
He ran into trouble in an IRS audit which uncovered his internet activity, and the US government subsequently requested a federal court summary judgment, claiming that the accounts at FirePay, PokerStars, and PartyPoker were foreign accounts reportable on a Report of Foreign Bank and Financial Accounts (FBAR) under 31 U.S.C. 5314 and subject to penalties under 31 U.S.C. 5321.
On June 4, 2014 the Federal District Court granted the government’s motion, confirming the inclusion of such accounts in FBAR reporting requirements.
The IRS has assessed a $10,000 penalty for each of the player’s four internet accounts.
FBAR requirements in the US have roots in the Bank Secrecy Act of 1970, which requires Americans to file an FBAR for a reporting year if:
*He or she is a United States person;
* He or she has a financial interest in, or signature or other authority over, a bank, securities, or other financial account;
* The bank, securities, or other financial account is in a foreign country;
* The aggregate amount in the accounts exceeds $10,000 in U.S. currency at any time during the year.
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