Online Gambling and Offshore Cryptocurrency Exchange Mailing Addresses for 2019

February 5th, 2019

With the United States v. Hom decision, we must again file an FBAR for foreign online gambling sites. An FBAR (Form 114) is required if your aggregate balance exceeds $10,000 at any time during the year. (The IRS and FINCEN now allege that foreign online poker accounts are “casino” accounts that must be reported as foreign financial accounts. The rule of thumb, when in doubt report, applies—especially given the extreme penalties.) You also should consider filing an FBAR if you have $10,000 or more in a non-US Cryptocurrency Exchange.

There’s a problem, though. Most of these entities don’t broadcast their addresses. Some individuals sent email inquiries to one of these gambling sites and received politely worded responses (or not so politely worded) that said that it’s none of your business.

Well, not fully completing the Form 114 can subject you to a substantial penalty. I’ve been compiling a list of the addresses of the online gambling sites. It’s presented below.

I have made major updates on this list for 2019. Many, many addresses have changed. We went through the complete database and attempted to find new addresses for each entry.

FINCEN does not want dba’s; however, they’re required for Form 8938. One would think that two different agencies of the Department of the Treasury would speak the same language…but one would be wrong.

You will see the entries do include the dba’s. Let’s say you’re reporting an account on PokerStars. On the FBAR, you would enter the address as follows:

Rational Entertainment Enterprises Limited
Douglas Bay Complex, King Edward Rd
Onchan, IM31DZ Isle of Man

Here’s how you would enter it for Form 8938:

Rational Entertainment Enterprises Limited dba PokerStars
Douglas Bay Complex, King Edward Rd
Onchan, IM3 1DZ Isle of Man

You will also see that on the FBAR spaces in a postal code are removed; they’re entered on Form 8938. You can’t make this stuff up….

Finally, I no longer have an address for Bodog. If anyone has a current mailing address, please leave it in the comments or email me with it.

Note: This list is presented for informational purposes only. It is believed accurate as of February 5, 2019. However, I do not take responsibility for your use of this list or for the accuracy of any of the addresses presented on the list.

The list is in the cut text below.

If anyone has additions or corrections to the list feel free to email them to me.

When You Move, Do the Little Things

February 2nd, 2019

Something I tell my clients when they move is to do all the little things such as going to the DMV and getting a new driver’s license and re-registering your cars. Another thing that needs to be done is to register to vote in your new state (especially if you were registered in your old state).

A news story out of Salt Lake City highlights the issue. The Utah State Tax Commission is going after individuals who leave the Beehive State if they don’t ‘unregister’ to vote in Utah. (In theory, when you register to vote in your new state, the Registrar of Voters in your new state notifies your old state to remove you.) At least one individual who moved from Utah to Austin, Texas was assessed Utah tax when he was a resident of the Lone Star State. He’s fighting the assessment, and he does stand a good chance of winning. However, it’s a lot easier to not have to fight the battle so if you move, do all the little things.

When 35 Equals 365

January 29th, 2019

Yet another entry in the “Math Is Hard” file, again from our friends at the Internal Revenue Service. From the Washington Post comes the news that it will take the IRS between 12 and 18 months to catch-up on the backlog from the 35-day shutdown. The Post was quoting information from two House staffers who heard this from the National Taxpayer Advocate.

On January 16th, the IRS had a backlog of 2.5 million unanswered pieces of mail. That’s up to 5 million now. Two of those unanswered pieces of mail are from me on behalf of clients (both disputing CP2000 notices). They had to be mailed to the IRS because the IRS turned off their fax machines during the shutdown. I told my clients that they’ll get a response…eventually. My hope is that the IRS has turned off the automatic issuance of Notices of Deficiency. Once you have one of those, the only way to stop the process is to file a Tax Court petition. (I think that has happened, as neither client has received a follow-up notice or a Notice of Deficiency.)

So let’s see what we have. Millions of pieces of unanswered mail. New tax forms that most IRS employees haven’t been trained on. Computers that are, in some cases, older than I am. Add in new tax law and you have the recipe for…well, let’s not call it a masterpiece. Perhaps goulash or a stew, or one of those horrific casseroles that I remember from the dorms at Cal. Suffice to say this is going to be a trying Tax Season.

Oh, I shouldn’t forget: If Congress and President Trump don’t come to an agreement in about two weeks (and President Trump put the odds at less than 50-50) the whole shutdown may repeat.

Gilbert Hyatt Wins Again But…

January 17th, 2019

The California Office of Tax Appeals upheld the California Board of Equalization’s ruling that Gilbert Hyatt mostly doesn’t owe California income tax in 1991 or 1992. Yes, you’re reading that correctly: This is a case that is 27 years in the making.

This is the same case that reached the US Supreme Court for the third time this month. The Supreme Court will decide whether or not states have sovereign immunity in other state’s court systems. (Mr. Hyatt sued the Franchise Tax Board in Nevada over various torts committed by the FTB.)

Unlike Bloomberg Tax which noted that the “[case] appears to be over,” I strongly suspect that the Franchise Tax Board (California’s income tax agency) will appeal the ruling into the court system. The FTB’s normal strategy is to exhaust litigation opponents. Thus, I believe that an appeal into the court system is likely.

When 85% Equals 90%

January 16th, 2019

One of my favorite expressions from poker that translates into tax is, “Math is hard.” But how can 85% equal 90%? No, the two aren’t equivalent. However, this year they are equal in one aspect of taxes.

The IRS announced today that they will waive the Estimated Tax Penalty for taxpayers who have prepaid 85% of their tax rather than the usual 90%:

WASHINGTON — The Internal Revenue Service announced today that it is waiving the estimated tax penalty for many taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year.

The IRS is generally waiving the penalty for any taxpayer who paid at least 85 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two. The usual percentage threshold is 90 percent to avoid a penalty.

The waiver computation announced today will be integrated into commercially-available tax software and reflected in the forthcoming revision of Form 2210 and instructions.

This relief is designed to help taxpayers who were unable to properly adjust their withholding and estimated tax payments to reflect an array of changes under the Tax Cuts and Jobs Act (TCJA), the far-reaching tax reform law enacted in December 2017.

It is unlikely that many (any) states will conform to today’s notice from the IRS.

It’s Time to Generate Those 2018 1099s

January 15th, 2019

It’s time for businesses to send out their annual information returns. These are the Form 1099s that are sent to to vendors when required. Let’s look first at who does not have to receive 1099s:

  • Corporations (except attorneys)
  • Entities you purchased tangible goods from
  • Entities you purchased less than $600 from (except royalties; the limit there is $10)
  • Where you would normally have to send a 1099 but you made payment by a credit or debit card

Otherwise, you need to send a Form 1099-MISC to the vendor. The best way to check whether or not you need to send a 1099 to a vendor is to know this before you pay a vendor’s invoice. I tell my clients that they should have each vendor complete a Form W-9 before they pay the vendor. You can then enter the vendor’s taxpayer identification number into your accounting software (along with whether or not the vendor is exempt from 1099 reporting) on an ongoing basis.

Remember that besides the 1099 sent to the vendor, a copy goes to the IRS. If you file by paper, you likely do not have to file with your state tax agency (that’s definitely the case in California). However, if you file 1099s electronically with the IRS you most likely will also need to file them electronically with your state tax agency (again, that’s definitely the case in California). It’s a case where paper filing might be easier than electronic filing.

If you wish to file paper 1099s, you must order the forms from the IRS. The forms cannot be downloaded off the Internet. Make sure you also order Form 1096 from the IRS. This is a cover page used when submitting information returns (such as 1099s) to the IRS.

Note also that sole proprietors fall under the same rules for sending out 1099s. Let’s say you’re a professional gambler, and you have a poker coach that you paid $650 to last year. You must send him or her a Form 1099-MISC. Poker players who “swap” shares or have backers also fall under the 1099 filing requirement.

Remember, the deadline for submitting 1099-MISCs for “Nonemployee Compensation” (e.g. independent contractors) to the IRS is now at the end of January: Those 1099s must be filed by Thursday, January 31st.

Here are the deadlines for 2018 information returns:

  • Thursday, January 31st: Deadline for mailing most 1099s to recipients (postmark deadline);
  • Thursday, January 31st: Deadline for submitting 1099-MISCs for Nonemployee Compensation to IRS;
  • Thursday, February 28th: Deadline for filing other paper 1099s with the IRS (postmark deadline);
  • Friday, March 15th: Deadline for mailing and filing Form 1042-S; and
  • Monday, April 1st: Deadline for filing other 1099s electronically with the IRS.

Remember, if you are going to mail 1099s to the IRS send them certified mail, return receipt requested so that you have proof of the filing.

Also note that most 1099s must be mailed to recipients. Mail means the postal service, not email. The main exception to this is if the recipient has agreed in writing to receiving the 1099 electronically. I consider this the IRS’s means of trying to keep the Post Office in business.

Fourth Quarter Estimated Tax Payments Due Today

January 15th, 2019

Today is January 15th. That means your fourth quarter estimated tax payments are due today. It’s a postmark deadline, so if you pay by mail, download Form 1040-ES, print voucher #4, enclose your check payable to “United States Treasury” (write your social security number and “2018 Form 1040-ES” on the check) and mail it using certified mail, return receipt requested, to the address for your state. And don’t forget your state estimated tax payments (if applicable). You can also use EFTPS and IRS Direct Pay to make your payments to the IRS electronically; most states offer webpay systems, too.

A Dutch Lament: Where oh Where Is PokerStars Located?

January 9th, 2019

In a few weeks I’ll be publishing my list of where online gambling sites are located. A question that arose in the Netherlands is in regards to the location of PokerStars, the largest online poker site. An excerpt from my 2018 list shows:

PokerStars
Rational Entertainment Enterprises Limited dba PokerStars
Douglas Bay Complex, King Edward Rd
Onchan, IM3 1DZ Isle of Man

PokerStars.eu
Rational Gaming Europe Ltd dba PokerStars.eu
Villa Seminia, 8, Sir Temi Zammit Ave
Ta’Xbiex, XBX1011, Malta

Why is this a big deal? Taxes.

PokerStars.com is based on the Isle of Man. The Isle of Man is a self-governing British Crown Dependency. It is not part of the European Union. The Isle of Man is located in the Irish Sea. Malta is another island; it’s located near Sicily in the Mediterranean Sea. Malta is a member of the European Union. PokerStars.eu is based in Malta. This matters for taxes in the Netherlands. If you’re a resident of the Netherlands and you play on PokerStars.com, you owe 29% tax on your winnings; however, if you play on PokerStars.eu, you don’t. Needless to say, Dutch residents play on PokerStars.eu.

Except the Dutch Tax Office disagreed. They held that since PokerStars.eu is owned by the Rational Group (the parent of PokerStars), and the Rational Group is based on the Isle of Man, that playing on PokerStars.eu is still playing on a site outside the European Union and 29% tax is owed. A District Court agreed with the Dutch Tax Office. That decision was then appealed to the Court of Appeals in ‘s-Hertogenbosch.

That court reversed the ruling (link is in Dutch). The ruling, as best as I can determine, states that the place of establishment of the holder of internet poker (here, Malta) is decisive for the classification as domestic or foreign game of chance and, thus, taxation of play on PokerStars.eu violates the Treaty Establishing the European Union. The decision can be appealed to the Supreme Court of the Netherlands but for now, playing on PokerStars.eu is tax-free.

News Story (in English): Dutchnews.nl

IRS to Open Tax Season on Monday, January 28th

January 8th, 2019

The IRS announced yesterday that the 2019 Tax Season will begin on Monday, January 28th:

Despite the government shutdown, the Internal Revenue Service today confirmed that it will process tax returns beginning January 28, 2019 and provide refunds to taxpayers as scheduled.

“We are committed to ensuring that taxpayers receive their refunds notwithstanding the government shutdown. I appreciate the hard work of the employees and their commitment to the taxpayers during this period,” said IRS Commissioner Chuck Rettig.

Congress directed the payment of all tax refunds through a permanent, indefinite appropriation (31 U.S.C. 1324), and the IRS has consistently been of the view that it has authority to pay refunds despite a lapse in annual appropriations. Although in 2011 the Office of Management and Budget (OMB) directed the IRS not to pay refunds during a lapse, OMB has reviewed the relevant law at Treasury’s request and concluded that IRS may pay tax refunds during a lapse.

The IRS will be recalling a significant portion of its workforce, currently furloughed as part of the government shutdown, to work. Additional details for the IRS filing season will be included in an updated FY2019 Lapsed Appropriations Contingency Plan to be released publicly in the coming days.

January 28th will be the first date that 2018 tax year business and individual tax returns can be filed with the IRS.

Tax Refunds May Be Issued During Government Shutdown

January 7th, 2019

Vice President Pence announced today that the IRS would issue tax refunds during the government shutdown. The Wall Street Journal reported this earlier today, but it’s unclear what the legal justification would be. Speculation (by the Journal) is that the power to issue refunds is based on the permanent appropriations for the refunds themselves.

Meanwhile, other IRS services are closed. I cannot fax Powers of Attorney forms to the IRS; those fax numbers are down. I have an outstanding IRS audit where we’re waiting for information from the IRS auditor; he’s not working right now so the audit is on hold. I need to setup a payment plan for another client; I have no one to call at the IRS right now.

And we still have no idea when we will be able to file 2018 tax returns. Prior-year business returns can be filed beginning tomorrow; however, current-year (2018) returns cannot be filed at this point.

As to when the partial government shutdown will end, your guess is as good as mine.