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  #121  
Old 02-11-2007, 09:57 PM
iceman5 iceman5 is offline
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Default Re: Neteller, the DOJ, and the IRS

I also got a letter last year from the IRS saying that I owed taxes on about $35000 in income.

I had sold some stock that I had forgotten about. For some unknown reason, when you sell a stock, the broker sends the IRS a report of the sale but not of the stock purchase.

They sent the standard report to the IRS which said I sold 3 stocks for a total of about $35K. Its up to me to report the transaction including the puchase and sales price. Since I didnt report it (because I forgot about it), the IRS showed that I sold it for $35K and bought it for $0 which gave me a $35K profit.

Once I filed the paperwork showing I actually bought the stock for $35,500 and that I lost $500 on the sale, I obviously didnt owe them anything.

But the letter was demanding payment of something like $8-$10K. The moral of the story is a demand letter from the IRS doesnt mean you absolutley have to pay the amount that the letter says.
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  #122  
Old 02-11-2007, 10:33 PM
iceman5 iceman5 is offline
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Default Re: Neteller, the DOJ, and the IRS

One more thing. There is alot of talk about the IRS being the big mean bully on the block. People love to say that they can look at your NT records and demand that you pay XX amount of taxes on what every they determine was your gambling income and that the burden of proof is on you to prove them wrong.

On the stock sale that I just mentioned, there was absolutley no proof anywhere of what price I bought that stock at since the broker only reposts the sale price. I couldve easily have said I bought it for $50K and sold it for $35K and claimed a big loss. I sent them no proof and they took my word for it and dropped their demand for the $8K in taxes.
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  #123  
Old 02-11-2007, 10:36 PM
gonebroke2 gonebroke2 is offline
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Default Re: Neteller, the DOJ, and the IRS

[ QUOTE ]
For some unknown reason, when you sell a stock, the broker sends the IRS a report of the sale but not of the stock purchase.


[/ QUOTE ]

The reason is not unknown. It was designed that way to help the filthy rich. The democrats are trying to put an end to it.
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  #124  
Old 02-12-2007, 02:13 AM
dragonystic dragonystic is offline
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Default Re: Neteller, the DOJ, and the IRS

[ QUOTE ]
Could you give some details on why the initial misunderstanding? Certainly understandable if you'd rather not.

[/ QUOTE ]

it was a direct IRA rollover. which isn't subject to federal income tax. i shouldnt go into more details. but its not poker related, if thats why you were asking.
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  #125  
Old 02-12-2007, 10:29 AM
brink brink is offline
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Default Re: Neteller, the DOJ, and the IRS

Just wanted to say I agree with posters like Grinder on this matter. Too much panic. Too much speculation. For starters, it will take a couple of years before anyone with a neteller account hears anything from any govt agency about it.

In the mean time, it's important to take a look at a couple of situations that were at least similar to this and see what happened there.

1) The Pay Pal situation. True it was civil in nature, and also was at the state level (New York). However, just the same, they (pay pal) paid a 10 million dollar fine AND turned over their records. I happened to have a pay pal acct at the time and made transactions to sportsbooks. I never heard from anyone though, and haven't heard of one gambler who had a problem.

2) When Visa or Mastercard turned over all their records to the IRS exposing all those Americans with offshore accounts and credit cards. Remember, in this instance, the IRS was directly involved. Not the DOJ. The number of people caught up in this, did not approach the number of Americans with Neteller accounts_there were 230,000) . Yet, it was STILL too many people for the IRS to deal with.

There were some instances of guys who had atm cards, used them for purchases over a few years totaling 6 figures, and never reported anything. In the end, they had to pay the back tax, plus a fine, plus the fees for their accountant and attorney. Not pretty, but no one went to jail. They also did NOT get in trouble for not reporting the existence of the offshore account.

In the end, the GOVT just wants their money.

Here is a clip from an article about the mastercard, and then two years later, amex deal, where they turned over records.
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It is legal to have an offshore account, provided it is reported and any taxes are paid. Failure to disclose such holdings is a felony punishable by up to five years in prison. In 1999, the I.R.S. said, 117,000 Americans checked the box on their income tax return disclosing an offshore account, far fewer than the number of MasterCard accounts the agency found in just Antigua and Barbuda, the Bahamas, and the Cayman Islands.

Because of secrecy laws in the tax-haven nations, the charge records reveal only account numbers — not names. So investigators, in a laborious process, must turn to merchants to obtain the names of the individuals through their credit card receipts.

Investigators will have an easier time finding tax evasion by customers of American Express, which agreed to turn over some records after giving the customers warning. But the agreement is limited to those accounts, billed to addresses in the three tax havens, that incurred at least five charges in the United States in 1998 and 1999 and in which at least one was for at least $2,500 on certain types of purchases, including automobiles, jewelry and yachts. Unlike MasterCard and Visa, which as networks do not know the names of customers, American Express knows its cardholders.

A senior I.R.S. official acknowledged yesterday that the agency lacked the resources to prosecute most of the offshore tax evaders or even to pursue civil penalties against more than a fraction.

"We have lots of indications of tax evasion here," said Dale Hart, an I.R.S. deputy commissioner, "and we are going to be using the resources we do have to work those cases to the best of our ability." But, she noted, "every day, several times a day, we make decisions about which cases we will work and which we will not."

Congress has sharply reduced the agency's budget for tax enforcement. Today, just 23 tax auditors remain on the payroll in Manhattan, the richest tax district in the country, down from 150 several years ago.

When the I.R.S. obtained records of one bank in the Cayman Islands, it said it found 1,500 cases worth prosecuting. "How many have they brought?" asked Larry Campagna, a criminal tax lawyer in Houston. "Maybe 10?" Mr. Campagna said that when the investigation was completed many of the credit cards would be found to have innocent explanations and not involve tax crimes. Ms. Kneally and Mr. Kagan expressed similar views. But Ms. Hart said she was confident from the data analyzed so far that the I.R.S. had found many deliberate tax evaders and not innocents caught up in a fishing expedition.

The I.R.S. disclosed its estimates in seeking records of Visa cards issued in 33 nations that have been used in the United States. "If the MasterCard information is representative of the industry," it said, "there could be one to two million U.S. citizens with debit-credit cards issued by offshore banks."

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Just do a google search and you'll find all kinds of articles related to this.
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  #126  
Old 02-12-2007, 11:51 AM
JBB JBB is offline
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Default Re: Neteller, the DOJ, and the IRS

If US Neteller members are going to see their money (which I think is very likely) I think it will take between 2 and 9 months. This is pure speculation/estimate on my part, but I don't see it taking more than a year. Just my opinion.
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