Neteller and the IRS

[goodgrief]

Your bank has most likely already filed a Suspicious Activity Report on you, since you did a transaction that was obviously designed to circumvent the Money Laundering Act of 1986. Wire transactions and such items as traveler's checkes, not usually thought of as cash, have been covered under that law for a long time, not just cash per se. In some situations, wire transactions are reported to Department of Treasury even for amounts as small as $750. Structuring is a felony. What's done is done, but the best way to prove you are not structuring is to take care to have some transactions that are clearly above the reportable limit. It's better to have some CTRs than a bunch of SARs. Federal tax law clearly states that you must pay taxes on the amount of your win. If you need more nuanced advice because you weren't able to actually collect some of your win, hire an accountant. Clearly, the advice I can give you in a short post is not comprehensive and as a kicker comes from experience in the 1990s. It might be best to consult with an attorney and/or accountant who has experience in this century rather than gathering information on an anonymous website.

There has been a requirement to keep a trail of everything that has come and gone from your bank accounts since the 1970's Bank "Privacy" Act, when banks were required to make copies of all checks for $100 or more. Finding it impractical to separate just those checks, banks simply make copies of everything. Save a lot of time and grief, and play by the rules or don't play. As a fun "fact," I once read that all of the CTRs collected in the Nixon era, were actually on paper and stored in a single warehouse, where they promptly rotted. So never say mold never did us nothing. [img]/images/graemlins/wink.gif[/img]

[Ace upmy Slv]

1) Pay your taxes

2) Get an accountant. It's like any other income producing profession. You pay taxes on your yearly profits from that year minus write-offs. It involves a lot more than just paying taxes on winnings or profits. There are write-offs for buy-ins to live tourney and online tourneys, possible write-offs for travel, hotel expenses, and food if it is deirectly related to the gambling you are doing. You are supposed to keep a log of every session you play for tax purposes, just like writing off travel/car mileage for a traveling sales job. You just don't write off 30K in mileage for the hell of it, you do it from your log. Again, get an accountant.

3) The 10K line for the IRS getting notified by your bank account is kind of a myth. Yes, all cash depsoits over 10K do notify the IRS. However, they get thousands a day, so they can't look into everyone. The banks are supposed to notify the IRS for any ABNORMAL deposits into ones account, regardless of if they are over 10K. If you have an average payroll deposit of $1500 per month and you have never had a balance over 3K and a deposit of 3K, a $9500 all of a sudden deposit is going to be sent to the IRS. It is supposed to be relevent to your income bracket and if the amount or the frequencies of the deposits are out of the ordinary. On the other hand, if you make $200K per year and regulary have large deposits and high balance, I don't think the IRS is going to blink at a 15K deposit into your account.

Hope that helps.

[ichthyologist]

[ QUOTE ]
You pay taxes on your yearly profits from that year minus write-offs.

[/ QUOTE ]
Only if you file as a professional gambler. The rules for "gambling income and losses" are very different for professionals and non-professionals (and can be very harsh on non-professionals).

His main point was definitely correct though: hire an accountant!

[aceupthepants]

Is Neteller required to submit account information to the U.S. gov?

[Dire]

Is there any specific reason nobody linked their Neteller with an offshores account?

[Dennisa]

[ QUOTE ]
like many of the players here I use Neteller and am worried about the money i have there. I want to pull it out but i've already made a 9500$ withdrawl a week ago and dont wanna past the 10k limit that requires my bank to notify the IRS. Is getting a e-check and waitin a month to cash it my best option? Or should i just EFT that sucker now?

[/ QUOTE ]

I believe the 10K is for cash transactions. You are doing an echeck which would not notify the IRS. Now when the IRS audits your tax records, they can subpoena your bank records and see the paper trail.

[Grisgra]

[ QUOTE ]
[ QUOTE ]
Do you guys pay taxes on what you win, or what you cash out?

[/ QUOTE ]

People do go to prison for this and [censored] their lives up.

[/ QUOTE ]

I think it's very difficult to take people seriously when they make up [censored] like this. It's okay to advise people that they should be paying their taxes (duh), but the chance of facing jail time because you made a few thousand dollars playing poker but did not report it is essentially nil.

[Sand]

[ QUOTE ]
like many of the players here I use Neteller and am worried about the money i have there. I want to pull it out but i've already made a 9500$ withdrawl a week ago and dont wanna past the 10k limit that requires my bank to notify the IRS. Is getting a e-check and waitin a month to cash it my best option? Or should i just EFT that sucker now?

[/ QUOTE ]

Rule #1 of adulthood: Don't #### with the IRS.

I am withdrawing a good part of my funds now (way overrolled anyway). I am ont concerned about it since as much as I hated writing the check I did pay my taxes.

[DING-DONG YO]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Do you guys pay taxes on what you win, or what you cash out?

[/ QUOTE ]

People do go to prison for this and [censored] their lives up.

[/ QUOTE ]

I think it's very difficult to take people seriously when they make up [censored] like this. It's okay to advise people that they should be paying their taxes (duh), but the chance of facing jail time because you made a few thousand dollars playing poker but did not report it is essentially nil.

[/ QUOTE ]

I am a CPA, I've been doing this for 10 years, I regularly advise people on 2+2 and I know what I'm talking about. I'm not making [censored] up.

"fudging" your taxes for a few grand will probably not land you in the can, sure.

However, it sounds like the OP is talking about felony tax evasion. That is willfully and consciously hiding income from the government for the purpose of not paying taxes on it. The OP is talking about tens of thousands of dollars. That isn't peanuts and the IRS might just prosecute someone for that.

I said "People do go to prison for this and [censored] their lives up". Which is true. I didn't say the OP would go to prison necessarily, but people do go to prison for tax evasion. Don't believe me? Google "Richard Hatch"

[sergsz]

A question about SARs and structuring. I pay all my taxes honestly. However, due to the neteller $5K EFT limit, i have a bunch of $5k EFTs into my bank instead of one larger one. Am i doing anything wrong or breaking any law? Can i possibly be accused of structuring even though I report and pay taxes on all my winnings?