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#41
02-20-2007, 05:18 PM
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Re: Frozen Neteller funds *ARE* taxable
I think Adanthar addressed this issue most appropriately in another thread so I will quote him and expand a little on his comment:
[ QUOTE ] this is overly cautious advice as well as an overly cautious interpretation of the tax code that borders on the absurd [/ QUOTE ] You think it's cut and dry, I do not. We can agree to disagree. 
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#42
02-20-2007, 05:21 PM
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Re: Frozen Neteller funds *ARE* taxable
[ QUOTE ]
THANK YOU! Finally a voice of reason. [/ QUOTE ] While I tend to agree with your position that your winnings are reportable the moment you end a "session" -- don't ever, ever, ever again say that SplawnDarts is a "voice of reason". There is no quicker way to lose your credibility in this forum.
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#43
02-20-2007, 05:23 PM
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Re: Frozen Neteller funds *ARE* taxable
[ QUOTE ]
I think Adanthar addressed this issue most appropriately in another thread so I will quote him and expand a little on his comment: [ QUOTE ] this is overly cautious advice as well as an overly cautious interpretation of the tax code that borders on the absurd [/ QUOTE ] You think it's cut and dry, I do not. We can agree to disagree. [/ QUOTE ] It's not even slightly cautious (let alone overly). Nor is it absurd. It is 100% black and white. The words "could have" in the IRS regs are crystal clear. Additionally "constructive receipt" cant be "undone" just because you decided to transfer your money to Neteller, instead of taking a check from the poker site. As a practical matter, that's where my advice may be "overly cautious". It depends on: 1. how much money we're talking about here. 2. will the IRS really get all the Neteller records from DOJ? 3. what is your risk tolerance? But by the letter of the law, my advice is black and white.
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#44
02-20-2007, 05:24 PM
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Re: Frozen Neteller funds *ARE* taxable
DDY, Neteller is a financial account, having nothing to do with your gambling at a poker site... that you were able to move your gambling winnings from a gambling site to a financial account that was in your control in 2006, is enough to demonstrate constructive receipt!
Arguably, the simple movement of chips off the gambling table into a financial account at a poker site, may be enough to qualify as constructive receipt as well; it certainly is enough to qualify as a taxable event based on session tracking. By your reasoning, gambling income would be tracked by deposits and withdrawals, which we all know is not correct!
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#45
02-20-2007, 05:29 PM
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Re: Frozen Neteller funds *ARE* taxable
ok, I'll concede, by the letter of the law, you are correct (which I think I conceded already in an earlier post above)
So, good luck advising your clients to pay taxes on funds they actually don't have access to and keeping their business. I would still not have a problem going to court over this. And Sniper, my reasoning does not logically lead to tracking income by deposits and withdrawals.
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#46
02-20-2007, 05:30 PM
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Re: Frozen Neteller funds *ARE* taxable
[ QUOTE ]
OP is 100% correct here unfortunately. As far as the IRS is concerned, you owed taxes on what you earned in 2006, 'earned' as defined by their rules of gross session winnings, with deductions for losing sessions. What happened to your money in 2007 is of no concern to them. You ought to be able to claim for the 2007 return a casualty/theft loss. But it has no bearing on your 2006 return. [/ QUOTE ] Again, 100% correct. Of course, the criminals will continue to claim that the IRS regs mean something other than what they PLAINLY SAY. It's pathetic, really.
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#47
02-20-2007, 05:30 PM
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Re: Frozen Neteller funds *ARE* taxable
this is pretty solid stuff, sports, thx for the expertise..
as far as point #2 above... in terms of the IRS reviewing ANYONES personal Neteller records (hard to figure them going through all US Neteller clients) will this ever be put on public record or be confirmed by "inside sources" do you think?
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#48
02-20-2007, 05:38 PM
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Re: Frozen Neteller funds *ARE* taxable
[ QUOTE ]
in terms of the IRS reviewing ANYONES personal Neteller records (hard to figure them going through all US Neteller clients) will this ever be put on public record or be confirmed by "inside sources" do you think? [/ QUOTE ] From the Neteller Press Release... "As a result of the restrictions placed by third parties, court-ordered seizures, and related legal concerns, the Group is currently unable to make payments to US customers. Nevertheless, the Group is in discussions with the USAO to manage an orderly return of funds to US customers. As part of these discussions, it is contemplated that the USAO will engage a forensic accounting firm, at the Group’s expense, to assist in this process and to examine the Group’s financial position. “The return of funds to our US customers is a top priority for NETELLER” said Ron Martin, Group President and CEO. US customers wishing to withdraw funds from their NETELLER e-wallet accounts will experience ongoing delays while these discussions continue, and a further update will be provided by the Group once effective repayment mechanisms are determined."
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#49
02-20-2007, 05:38 PM
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Re: Frozen Neteller funds *ARE* taxable
[ QUOTE ]
this is pretty solid stuff, sports, thx for the expertise.. as far as point #2 above... in terms of the IRS reviewing ANYONES personal Neteller records (hard to figure them going through all US Neteller clients) will this ever be put on public record or be confirmed by "inside sources" do you think? [/ QUOTE ] Hey - not sure what you mean by inside sources or public record, but i would just assume the IRS will eventually see everything Neteller related. That's because, in addition to the Neteller records the DOJ will get, the Neteller ATM records can be subpoena'd via the domestic bank(s), and also any deposits/wires into your bank acct can obviously be seen by the IRS. So just claim your taxes correctly and file form TDF 90-22.1 and Schedule B if necessary (search other threads for discussion of that form).
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#50
02-20-2007, 06:13 PM
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Re: Frozen Neteller funds *ARE* taxable
[ QUOTE ]
[ QUOTE ] this is pretty solid stuff, sports, thx for the expertise.. as far as point #2 above... in terms of the IRS reviewing ANYONES personal Neteller records (hard to figure them going through all US Neteller clients) will this ever be put on public record or be confirmed by "inside sources" do you think? [/ QUOTE ] Hey - not sure what you mean by inside sources or public record, but i would just assume the IRS will eventually see everything Neteller related. That's because, in addition to the Neteller records the DOJ will get, the Neteller ATM records can be subpoena'd via the domestic bank(s), and also any deposits/wires into your bank acct can obviously be seen by the IRS. So just claim your taxes correctly and file form TDF 90-22.1 and Schedule B if necessary (search other threads for discussion of that form). [/ QUOTE ] I had assumed the IRS would see these records eventually also, I was just wondering if it would be a matter of public record the way the announcement of Neteller turning over records to the DOJ was... I've posed this question on another thread but haven't received an answer, perhaps you would know... Is it possible to ammend an '05 return in regards to claiming a foreign bank acct on form TDF 90-22.1? I did not file this form for '05 by the JUN 30 deadline... If this is in fact ammendable do you know if there is a penalty and how much it is?
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