When Acquire Doesn’t Mean Acquire

March 4th, 2021

It’s time for today’s lessen in double-speak, or bureaucratese, courtesy of the IRS.  On the top of Form 1040, just below your address is a question:

At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?

It seems simple: If you bought any cryptocurrency, sold any, exchanged any, sent some, or received any, check the box marked “Yes.”  Except that’s wrong, per the IRS.  On March 2nd, the IRS updated their Frequently Asked Questions (FAQ) on cryptocurrency.  If all you did was acquire (purchase) cryptocurrency, you can answer no:

Q5. The 2020 Form 1040 asks whether at any time during 2020, I received, sold, sent, exchanged, or otherwise acquired any financial interest in any virtual currency.  During 2020, I purchased virtual currency with real currency and had no other virtual currency transactions during the year. Must I answer yes to the Form 1040 question? (3/2/21)

A5. No.  If your only transactions involving virtual currency during 2020 were purchases of virtual currency with real currency, you are not required to answer yes to the Form 1040 question. [emphasis added]

As the National Taxpayer Advocate pointed out, the IRS wants information on individuals who had reportable sales of cryptocurrency.  That would be sales, exchanges, and spending; it would also include individuals who received cryptocurrency for free (but not gifts).  The IRS wants to make sure individuals who have taxable events with cryptocurrency have reported them on their tax returns.

Is it a problem if you answered “yes” but all you did was acquire cryptocurrency?  Definitely not.  The question is poorly written, and you answered truthfully based on the question.  However, you might end up receiving an IRS notice if the IRS computer looks for taxable cryptocurrency activity on your return and doesn’t see any.  The solution, which likely will be adopted for 2021 returns, is to change the question to read, “At any time during [the tax year], did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency in a reportable transaction?

I give the IRS an “A” for knowing that many individuals are not reporting cryptocurrency activity on their tax returns, and a “D-” for writing questions.

Are California $600 Stimulus Payments Taxable?

February 25th, 2021

The state of California will soon be issuing $600 stimulus payments to an estimated 5.7 million residents.  These payments will go to:

  • Households receiving the California Earned Income Tax Credit for 2020 (typically making $30,000 or less)
  • Taxpayers with Individual Tax Identification Numbers (ITINs) who didn’t receive federal stimulus checks
  • Households with Individual Tax Identification Numbers and income below $75,000

ITIN taxpayers who also qualify for the California Earned Income Tax Credit will receive a total of $1,200.

The payments will be going out after taxpayers file their 2020 tax returns.  One client asked me, “Is that payment going to be taxable income on my federal tax return?”  The answer is clearly yes.

Any accession to wealth is taxable unless exempted by Congress.  State grants are taxable income.  That $600 payments will be taxable income on taxpayers’ 2021 federal tax returns, and impacted taxpayers should receive Form 1099-MISC forms from the state of California.  However, these payments will not be taxable income on taxpayers’ California tax returns–California has said these are nontaxable grants, and a state has the right to exclude that income from its taxation system.

IRS Extends Some Filing Deadlines for Victims of Texas Winter Storms

February 22nd, 2021

The IRS announced today that they have extended the deadline for victims of Texas winter storms until June 15th. This impacts the March 15th partnership and S-Corporation filing deadline and the April 15th individual, C-Corporation, and Trust/Estate deadline for those in a FEMA-declared disaster area. (A quick look says that this is almost the entire state of Texas.)

The IRS said they will work with individuals outside the official disaster zone who have been impacted:

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Online Gambling and Cryptocurrency Addresses for 2021

February 19th, 2021

If you have one or more foreign financial accounts and you have $10,000 aggregate in those account(s) at any time during 2019, you must file the Report of Foreign Bank and Financial Accounts (the “FBAR”). This is Form 114 from FINCEN. (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.

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 Intellectual Properties Limited
Douglas Bay Complex, King Edward Rd
Onchan, IM31DZ Isle of Man

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

Rational Intellectual Properties 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.

Foreign cryptocurrency exchanges with just cryptocurrency do not have to be reported on the FBAR. However, if the account holds anything else (such as ‘fiat’ currency like US dollars, Euros, etc.) the account is reportable.

There is no dispute, though, about reporting foreign cryptocurrency exchanges on Form 8938: They must be reported on Form 8938 (if you have a Form 8938 filing requirement).

Note: This list is presented for informational purposes only. It is believed accurate as of February 27, 2021. 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.

The list is in alphabetical order by the common name (not the legal name) of the gambling site. An entry is:

Common Name
Legal Name
City, State/Territory, Postal Code, Country

Note that not all entities have states/territories or postal codes.

IMPORTANT: When reporting on Form 114, the dba’s are not included. When reporting on Form 8938, the dba’s are included.

Ocean Star Limited dba 10bet.com
Dragonara Business Center, 5th Flr, Dragonara Rd
St. Julians, STJ3141, Malta

12Bet (except U.K.)
Pacific Sea Marketing International Ltd. dba 12bet.com
MillMall, Ste 6, Wickhams Cay 1, PO Box 3085
Road Town, Tortola, British Virgin Islands

12Bet (U.K.)
TGP Europe Limited dba 12bet.uk
22A Castle St
Douglas, IM1 2EZ, Isle of Man

Cube Limited dba 188bet
Ground Floor, St. George’s Court, Upper Church St
Douglas, IM1 1EE, Isle of Man

5Dimes Casino and Sportsbook
Edificio Equus
San Jose, Costa Rica

888poker (except U.K.)
Virtual Digital Services Limited dba 888 Poker
Level G, Quantum House; 75, Abate Rigord St
Ta’Xbiex, XBX1120, Malta

888poker (U.K.)
888 UK Limited dba 888 Poker
Ste 601-701, Europort
Gibraltar, Gibraltar

AA Poker
Memoriki Limited dba AA Poker
18/F, Star Centre, 35 Hung To Rd, Kwun Tong, Kowloon
Hong Kong, Hong Kong

America’s Cardroom
BMX Entertainment dba America’s Cardroom
71C Georgio A, Office 3, Germasogeia
Limassol, 4047, Cyprus

Asianconnect N.V. dba Asianconnect88
E-Zone Beheer van Engelen N.V., Van Engelenweg 21A
Willemstad, Curacao (Netherlands Antilles)

Best Global N.V. dba Best Poker
BS Building, Level 1, Triq Il-Mosta,
Lija, LJA 9012, Malta

Hillside, Festival Way, Stoke-on-Trent
Staffordshire, ST1 5SH, United Kingdom

Managas Gaming Malta Limited dba Betclic
Level 3, Tagliaferro Business Center; High St c/w Gaiety Ln
Sliema, SLM1551, Malta

Global Limiting Holding EOOD dbaBetcoin.ag
Nikola Vaptsarov Blvd
Sofia, Bulgaria

TV Global Enterprises Ltd dba BetCris
Villa Seminia, 8 Sir Temi Zammit Ave
Ta’Xbiex, XBX1011 Malta

LC International Limited dba BETDAQ
Ste 6, Atlantic Suites
Gibraltar, Gibraltar

Diamond Sportsbook International dba BETDSI
Santa Ana
San Jose, Costa Rica

PBB Counterparty Services Limited dba Betfair
Triq il-Kappillan Mifsud
St. Venera, SVR1851, Malta

Petfre (Gibraltar) Limited
5/2 Waterfront Place
Gibraltar, Gibraltar

Betmost Poker
WHG (International) Limited dba Betmost Poker
6/1 Waterfront Place
Gibraltar, Gibraltar

BLS International dba Betonline.ag
Panama City, Panama

BML Group Ltd Limited dba Betsafe Poker
Betsson Experience Center, Ta’Xbiex Seafront
Ta’Xbiex, XBX1027, Malta

BML Group Ltd dba Bettson
Betsson Experience Center, Ta’Xbiex Seafront
Ta’Xbiex, XBX1027, Malta

Firepower Trading Ltd dba BetUS
Anthinodorou, 3 Dasoupoll, Strovolos
Nicosia, 2025, Cyprus

Online Management Services dba betusa.ag
Jasmine Ct, Ste 17, Friar’s Hill Rd
St. Johns, Antigua

Victor Chandler International Ltd dba BetVictor
Ste 23, Portland House, Glacis Rd
Gibraltar, Gibraltar

Binance Marketing Services Limited
C85602 Melita Ct, Level 3, Triq Giusseppe Cali
Ta’Xbiex, XBX1420, Malta

Bitfinex (non-US users)
BFXNA Inc dba Bitfinex
Ste 13/F, 1308 Bank of America Tower, 12 Harcourt Rd, Central
Hong Kong, Hong Kong

Bitfinex (US users)
Finex Inc. dba Bitfinex
Chaucer Group Limited, 10 Lower Thames
London, E3R 6E14, United Kingdom

114 Lavender St, #09-88, Ct Hub 2
Singapore, 338729, Singapore

100x Grouop dba BitMex
Second Flr, Capital City, Independence Ave, PO Box 1008
Victoria, Mahe, Seychelles

Bitstamp Ltd.
5 New Street Square
London, EC4A 3TW, United Kingdom

Black Chip Poker
Black Chip Poker
3/4-8 Churchill St
Coolangatta, Queensland 4225, Australia

Rue de Merl, 741, Rue Phillipell
Luxembourg, 2340, Luxembourg

Bleu Digital Enterprises Ltd
527, St. Paul’s St
St. Paul’s Bay, Malta

Manila, Philippines

Costa Rica International Sports dba Bookmaker.eu
Edificio La Colmena; 75m W Contraloria de la Sabana Sur
San Jose, Costa Rica

Lynton Limited Ltd dba Bovada
Craig Plaza, 51-55, Fountain St
Belfast, BT1 5EB, United Kingdom

Boylesports Ltd
Finnabair Industrial Estate, Dundalk
County Louth, Ireland

ElectraWorks Limited dba BWIN
Ste 6, Atlantic Suites, Europort Ave
Gibraltar, Gibraltar

Cafe Casino
Lynton Limited dba Cafe Casino
Craig Plaza, 51-55 Fountain St
Belfast, BT1 5EB United Kingdom

Carbon Poker
PDC Global Collections Ltd dba Carbon Poker
19/21 Circular Rd
Douglas, Isle of Man

Carib International Entertainment Ltd dba CaribSports
35 New Rd
Belize City, Belize

Cashpoint (Malta) Ltd.
Level 1, Salvu Psaila St
Birkirkara, BKR9077, Malta

Mandarin Gaming NV dba Casino 77
Soho Office 3A, Edge Water Complex, Elia Zammit St
St. Julians, Malta

Celeb Poker
Wizplay OS (Cyprus) Limited dba Celeb Poker
Flat 22, 6 Tassou Papadopolou St
Agios Dometios, Nicosia, 2372, Cyprus

CEX.io Ltd
24th Flr, One Canada Square, Canary Wharf
London, E14 5AB, United Kingdom

Click and Buy
Click and Buy International Ltd
6-9 Cynthia St
London, N1 9JF United Kingdom

Halcyon Super Holdings BV dba Cloudbet
Pareraweg 45
Willemstad, Curacao

CoinEgg Ltd
CoinEgg Ltd
38 Hunstanton Ave
Birmingham, B17 8TA, United Kingdom

Confirmo Ltd. dba Coinmate
The Shard Floor 24/25, 26 London Bridge St
London, SE1 95G, United Kingdom

ComeOn! Poker
Co-Gaming Limited dba ComeOn! Poker
3rd Flr, Spinola Park, Tirq Mikiel Ang Borg
St. Julians, SPK1000, Malta

Coral Poker
Gala Interactive (Gibraltar) Ltd dba Coral Poker
Ste 6, Atlantic Suites
Gibraltar, Gibraltar

WeWork Bldg, 12 Hammersmith Grove
London, W6 7AP, United Kingdom

CurrencyFair Ltd
Colm House, 91 Pembroke Rd
Ballsbridge, Dublin, Ireland

Bayvieew Technologies Ltd dba Dafabet
RCBC Plaza, Makati
Cagayan Valley, Philippines

PSI-Pay Ltd dba ecoPayz
Afon House, Worthing Rd
Horsham, West Sussex, RH12 1TL, United Kingdom

Electrum [Bitcoin Wallet]
63-65 Blvd Massena
Paris, 75013, France

Ixaris Systems (Malta) Ltd. dba Entropay
2 Stephen St
London, W1T 1AN, United Kingdom

Expekt Sportsbook
Mangas Gaming Malta Limited dba Expekt Sportsbook
Level 3, Tagliaferro Business Center, High St c/w Gaiety Ln
Sliema, SLM1551, Malta

Fabulous Poker
Investments Manager, S.A. dba Fabulouspoker.com
Sabana Sur
San Jose, 10000, Costa Rica

Fairlay LLC
200 Meters norte de la Cruz Roja de Santa Ana, 8vo Piso
San Jose, San Rafael, Costa Rica

Av. Eng. Luis Carlos Berrini, 550; Cidade Moncoes
Sao Paulo, Brazil

Gala Poker
LC International Limited dba Gala Poker
Ste 6, Atlantic Suites
Gibraltar, Gibraltar

PO Box 31119, Grand Pavilion, Hibiscus Way; 802 W Bay Rd
Grand Cayman KY1-1205, Cayman Islands

GateHub Limited
Level 3, 207 Regent St
London, W1B 3HH, United Kingdom

Dynamex (Pty) Ltd dba G-bets
PO Box 7383, Westgate
Roodeport, 1734, South Africa

NSUS Limited dba GGPoker
Ste 15, The Cubes Offices, Beacon South Quarter, Sandyford Business Park
Dublin, 18, Ireland

Global Poker
VGW GP Limited dba Global Poker
5-7 Matilda Ct, Giuseppe Cali St
Ta’Xbiex, XBX1423, Malta

Goalwin Poker
Merkur Interactive Italia SpA dba Goalwin Poker
Via dei Lavorsatirn 136/138 20092
Cinisello Balsamo, Italy

gtbets.eu dba GTBets
Willemstad, Curacao

Heritage Sports
Heritage Sports
San Jose, Costa Rica

Hit Tech Solutions Development Ltd dba HitBTC
Ste 15, Oliaji Trade Centre, Francis Rachel St
Victoria, Mahe, Seychelles

Block 2, Liangsheng Bldg, Block 29B, 11
Beijing, China

Iconomi Ltd
10 Orange St
London, WC2H 7DQ, United Kingdom

Ignition Casino
Lynton Limited dba Ignition Casino
Craig Plaza, 51-55 Fountain St
Belfast, BT1 5EB, United Kingdom

International Gaming & Entertainment Ltd dba Intertops
PO Box W427, Teledome bldg, Old Parham Rd
St. John’s, Antigua & Barbuda

Interwetten Gaming Ltd.
2nd Flr, Global Capital Bldg, Testaferrata St
Ta’Xbiex, XBX1403, Malta

Playtech (Cyprus) Limited dba iPoker
Ground Flr, St. George’s Ct, Upper Church St
Douglas, IM1 1EE, Isle of Man

Iron Poker
Universe Entertainment Services Malta Limited dba Iron Poker
Level 3, Valletta Buildings, South St
Valletta, VLT1103, Malta

J88 Poker
J88Ent Ltd dba J88 Poker
Unit 1101, 11th Flr, Tower 1, Enterprise Square, No. 9, Sheung Yuet Rd; Kowloon Bay
Hong Kong, Hong Kong

Jazz Sports
DPT Sports Group dba jazzsports.ag
DPT Building, Pavas
San Jose, Costa Rica

Juicy Stakes Poker
Thinkquick Ltd dba Juicy Stakes Poker
3997 Armory Bldg
Basseterre, St. Kitts (Saint Kitts and Nevis)

Investments Manager, S.A. dba Justbet.co
Edificio La Colmena
San Jose, Costa Rica

Just Dice
PO Box 0823-03411
Panama City, Panama

KuCoin Co., Limited
Hong Kong, Hong Kong

LC International plc
Ste 6, Atlantic Suites
Gibraltar, Gibraltar

Liberty Slots Group dba Libertyslots.lv
Willemstad, Curacao

Red Velvet Investments Ltd dba Livecoin
Belize City, Belize

DPT Sports Group dba looselines.ag
DPT Building, Pavas
San Jose, Costa Rica

San Jose, Costa Rica

Luxon Payments
Luxon Payments Ltd
Cobden Chambers, Pelham St
Nottingham, NG1 2ED, United Kingdom

Abraham de Veerstraat 9
Willemstad, Curacao

Triplebet Limited dba Matchbook
Inchalla, Le Val
Alderney, GY9 3UL, Channel Islands (Guernsey)

104363744 Ltd dba Mercatox
Mailboxes E.T.C., Peel House 30
Altincham, WA14 2PX, United Kingdom

MIR Limited UK Ltd dba MuchBetter
Finance House, 20/21 Aviation Way
Southend, Essex, SS2 6UN, United Kingdom

Duranbah Limited N.V. dba MyBookie.ag
7 Abraham de Veerstraat
Willemstad, Curacao (Netherlands Antilles)

Run Good N.V. dba Natural8.com
9 Abraham de Veerstrat
Willemstad, Curacao (Netherlands Antilles)

NetBet Enterprises Ltd dba NetBet
209, Marina Street
Pieta, PTA9041, Malta

Paysafe Financial Services Ltd. dba Neteller
Compass House, Vision Park, Chivers Way
Cambridge, CB24 9BZ, United Kingdom

Nitrogen Sports
Nitrogen Sports
San Jose, Costa Rica

Nordic Bet
BML Group Ltd dba NordicBet
Betsson Experience Center, Ta’Xbiex Seafront
Ta’Xbiex, XBX1027, Malta

Galaxy Grouop Ltd dba Noxwin.com
Intershare Chambers
Road Town, Tortola, British Virgin Islands

Oanda Europe
Oanda Europe Limited
Flr 3, 18 St. Swithin’s Ln
London, EC4N 8AD, United Kingdom

Oddsmaker Casino
Curacao, Curacao (Netherlands Antilles)

Aux Cayes FinTech Co. Ltd dba OKEx
Unit 10-02, Level 10, Menara Binjai, No. 2, Jalan Binjai
Kuala Lumpur, 50450, Malaysia

Pacific Poker
Cassava Enterprises (Gibraltar) Limited dba Pacific Poker
Suite 601-701, Europort Ave
Gibraltar, Gibraltar

PBB Counterparty Services Limited dbaPaddyPoker
Triq il-Kappillan Mifsud
St. Venera, SVR1851, Malta

Party Poker
Electra Works dba Party Poker
Suite 6, Atlantic Suites, Europort Ave
Gibraltar, Gibraltar

Pinnacle Sports
Ragnarok Corporation N.V. dba Pinnacle.com
Pletterjweg 43
Willemstad, Curacao (Netherlands Antilles)

Planetwin365 Poker
SKS365 Malta, dba Planetwin365 Poker
Corso Vittoria Emanuel 11, 282-284
Rome, 00188, Italy

Players Only
Gaming Ventures Ltd. dba Players Only
60 Nevis St
St. John’s, Antigua (Antigua and Barbuda)

Olincorp Limited dba poker4u
7, Florints St, Greg Tower, 6th Flr
Nicosia, 1065, Cyprus

Mandarin Gaming NV dba Poker770
PO Box 4920
Curacao, Netherlands Antilles (Curacao)

PH Multitech Curacao N.V. dba Pokerhost
E-Commerce Park, Vredenberg
Willemstad, Curacao, (Netherlands Antilles)

King Enterprises BG Ltd. dba PokerKing
Plaza P.L. Brion Unit 4
Willemstad, Curacao

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

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

REEL Malta Limited dba PokerStars.fr
Villa Seminia, 8, Sir Temi Zammit Ave
Ta’Xbiex, XBX1011, Malta

Polo Digital Assets, Ltd. dba Poloniex
F20, 1st Floor, Eden Plaza
Eden Island, Seychelles

AceKing Tech Limited dba PPPoker
OMC Offices, Babrow Bldg
The Valley, 2640, Anguilla

PredictIt Europe Limited
6 Agar St
London, WC2N 4HN, United Kingdom

Red Kings
SkillOnNet Ltd. dba Red Kings
Office 1/5297 Level G, Quantum House, 75 Abata Rigord St
Ta’Xbiex, XBX1120, Malta

Red Stag Casino
Heelsumstraat 51, E-Commerce Park
Willemstad, Curacao

RedStar Poker
RSP Entertainment N.V. dba RedStar Poker
12 Georgiou Grive Digeni, Stephanie House, Office 101
Nicosia, 3101, Cyprus

Skrill (formerly Moneybookers)
Skrill Limited
Floor 27, 25 Canada Square
London, E14 5LQ, United Kingdom

Skybook Sportsbook and Casino
Azure Ventures Limited dba Skybook Sportsbook and Casino
G1, Haven Ct, 5 Library Ramp
Gibraltar, Gibraltar

Lynton Limited dba slots.lv
Craig Plaza, 51-55 Fountain St
Belfast, BT1 5EB, United Kingdom

Smarkets (Malta) Limited
The Hedge Business Center, Level 7, Triq Ir-Rampa ta’ San Giljan
St. Julians, STJ1062, Malta

5Dimes Casino and Sportsbook dba sportbet.com
Edificio Equus
San Jose, Costa Rica

Blue High House S.A. dba Sportsbetting.ag
Area Bancaria, Avenida Balboa
Panama City, Panama

Paddy Power Betfair dba sportsbook.eu
Belfield Office Park, Beech Hill Rd
Clonskeagh, Dublin, 4, Ireland

Sports Interaction
Mohawk Online dba Sports Interaction
2006 Old Malone Rd, PO Box 1539
Kahnawake, QC, J0L 1B0, Canada

OrangeWebsite.com dba swcpoker (aka Seals With Clubs, swcpoker.eu)
Kapparstigur 7
Reykjavik, Iceland

The Greek
WS Processing Ltd. dba The Greek Sportsbook
#1 Mangrove Way, M.B.F.Z.
Freeport, Montego Bay, Jamaica

Tiger Gaming
Troy Logic Limited dba Tiger Gaming
170, Patar House, Level 1 (Ste A203), Psaila St
Birkirkara, BKR9077, Malta

Titan Poker
Universe Entertainment Services Malta Limited dba Titan Poker
Level 3, Valletta Bldgs, South St
Valletta, VLT1103, Malta

6th Flr, The Tea Bldg, 56 Shoreditch High St
London, E1 6JJ, United Kingdom

True Poker
BMX Entertainment dba True Poker
71C Georgio A, Office 3, Germasogeia
Limassol, 4047, Cyprus

Trannel International Ltd. dba Unibet
Level 6, The Centre, Tigne, Point
Sliema, Malta

5Dimes Casino and Sportsbook dba Eurobet
Edificio Equus, San Pedro de Montes de Oca, 7mo Piso
San Jose, Costa Rica

San Jose, Costa Rica

William Hill
WHG (International) Ltd
6/1 Waterport Place
Gibraltar, Gibraltar

CS 50746, CEDEX 07
Paris, 75345, France

Winner Poker
Universe Entertainment Service Malta dba Winner Poker
Level 3, Valletta Bldgs, South St
Valletta, VLT 1103, Malta

Electraworks Limited (bwin.party digital entertainment plc) dba WPTPoker
Ste 711, Europort
Gibraltar, Gibraltar

Moscow, Russia

Dowson Universal Technologies Limited dba Youwager.eu
20 Stuart Ct
Consett, County Durham, DH8 5GA, United Kingdom (hide)

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

More Erroneous IRS Notices

February 10th, 2021

In yesterday’s mail we received several IRS CP59 Notices for clients. What’s a CP59 Notice? Well, here’s the first two lines:

You didn’t file a Form 1040 tax return.

You haven’t filed your tax return for the tax year ending on December 31, 2019.

Of course, all the clients had filed their 2019 tax returns in October. However, these clients had to paper-file for various reasons and the IRS simply has not yet processed those returns. Based on a phone call with the IRS, it appears that the IRS is still processing paper returns from July! Yikes! Based on that timeline these returns may not be processed until May.

These notices were issued because these clients had income that showed they needed to file a tax return (1099s, etc.) and none had been noted. The notices, dated February 15, 2021, are automatically sent four months after the extension deadline.

The CP59 notice includes a Form 15103 that you’re supposed to complete and return along with a copy of your tax return. The helpful individual I spoke with at the Practitioner Priority Service noted that taxpayers who paper-filed after July and who receive the CP59 notice should simply ignore the notice and should not file Form 15103 and send another copy of their tax return.

The IRS is simply backlogged with paper, and while IRS Commissioner Rettig has stated the IRS is caught up, that’s simply not the case. The handy IRS Operations Status Page says that the IRS is opening mail within normal timeframes. Unfortunately, that same page states:

The IRS has also made significant progress in processing returns. As of January 29, 2021, we had 6.7 million individual tax returns in the processing pipeline

How long you may have to wait:  It depends on where you sent your tax return and where it is in the process. We are processing returns we received over the summer due to the extended July 15 tax filing due date and, in some cases, are processing tax returns dated as early as July 15, 2020. However, we are rerouting tax returns and taxpayer correspondence from locations that are behind to locations where more staff is available, and we are taking other actions to minimize any delays. Tax returns are opened in the order received. As the return is processed, it may be delayed because it has a mistake, is missing information, or there is suspected identity theft or fraud. If we can fix it without contacting you, we will. If we need more information or need you to verify that it was you who sent the tax return, we will write you a letter. The resolution of these issues depends on how quickly and accurately you respond, and the IRS staff trained and working under social distancing requirements to complete the processing of your return.

What you should do: Other than responding to any requests for information promptly, there’s no action you can take. We’re working hard to get through the backlog. Please don’t file a second tax return or contact the IRS about the status of your return. [emphasis added]

There’s no blame to the IRS–this is the reality of dealing with Covid. Unfortunately, with 2020 returns about to start flowing into the IRS I don’t see improvement coming on return processing anytime soon. What can you do? Basically, efile if at all possible. Electronically filed returns, for the most part, are processed smoothly. But if you have to paper-file for any reason, just expect your return to take time to be processed. I’d estimate nine months for a paper-filed return to be processed. (The IRS will be backdating the filing date to the postmark date.)

And if you do have to paper-file a return, make sure you use certified mail. It’s inevitable that some returns are going to get lost. If you have your certified mail receipt, your return should be treated as if it was filed on the date you mailed it to the IRS. This year, it’s absolutely worth the additional $5.

IRS Sending Erroneous Notices With Erroneous Content

February 4th, 2021

Today is February 4, 2021. But the IRS computer has some other ideas about the date.

The IRS sent many CP21C notices telling individuals that their Economic Impact (Stimulus) payments were offset to your 2007 tax account. Yikes! From the National Taxpayer Advocate:

The IRS’s more than 109,000 CP21C letters informed the recipient, “We applied a credit to your 2007 [that is not a typographical error!] tax account due to new legislation. We used (offset) all or part of your economic stimulus payment to pay your federal tax as the law allows … As a result, you don’t owe us any money, nor are you due a refund.” Unsurprisingly, the letter directs the taxpayer to a general phone number to resolve this issue. Equally unsurprisingly, taxpayers will face more frustration because the official level of service so far in 2021 is 14 percent on the Accounts Management telephone lines, down from 61 percent for the same period last year, and employees have answered only nine percent of taxpayer calls. The CP21C letter may very well drive the more than 109,000 recipients to the phone lines on the cusp of filing season when taxpayers may already be struggling with filing and RRC questions. The letter and taxpayers’ phone experience may both escalate taxpayer frustration.

The only quibble I have with this is “The letter and taxpayers’ phone experience may both escalate taxpayer frustration.” Calling the IRS today is an exercise in futility for the most part. When I do get through–and I did three times yesterday!–I find the IRS telephone agents very professional and willing to assist me. But the 14% number mentioned above seems about right for the general lines (it’s probably 25% for the tax professional numbers–better, but not great), and that’s a huge issue.

Getting back to the notice, these notices were basically completely erroneous. What the IRS meant to write was:

Because we don’t show a filed 2019 tax return nor a 2018 return, we cannot issue you the Economic Impact (Stimulus) payment. You can still get the payment by taking a tax credit on your 2020 tax return.

The IRS did note this on their website but how many of these taxpayers will look on this website and get down to the bottom of the General Information questions and click on the link to read the information? My guess is less than 1% of the 109,000 who received the erroneous notice. Indeed, this should be at the top of the webpage so that those impacted by this will see it.

In any case, just another “fun” fact for the 2021 Tax Season.

Calling the IRS? Good Luck! (Because You Will Really, Really Need It)

February 2nd, 2021

I need to speak with the IRS regarding four clients. Unfortunately, I need to speak with three different departments within the IRS for these clients. I’ve been attempting to reach the IRS for over a week first thing in the morning (7am PST), late in the day (2-3pm PST), and in the middle of the day (sometime between 10am and 12n PST). In almost all cases I’ve heard this message:

We’re sorry, but due to extremely high call volumes in the topic you’ve chosen we cannot take your call at this time. Please try your call again later.

I did manage to get a human this afternoon. Exactly 3 minutes into my call he vanished, I heard a click, and the call ended. He did not call me back.

For two of my clients, I may be forced to write letters even though the issues are (theoretically) easily resolvable by a phone call. Instead, they’ll likely go in the 5+ million pieces of mail sitting in a trailer and the clients will have to wait (probably a year) for a response, and might have to send another letter.

And I’m calling numbers that are designed for tax professionals with theoretically less hold time. It’s basically impossible to get through on the regular numbers. I tried calling the international IRS contact number and received a busy signal; that’s the first time that’s ever happened to me. For individuals needing tax assistance regarding information from the IRS, the lyrics from Man of La Mancha’s “Impossible Dream” come to mind: “To dream the impossible dream….”

I realize the IRS (along with all of us) are dealing with Covid-related issues. However, this performance is simply unacceptable. I have clients who may be subject to levies who have filed appeals (thus, they are not supposed to be subject to levies) and I cannot speak to anyone at the IRS to have collection activities stopped on their accounts. The IRS can verify this easily during a phone call. But I can’t reach a human.

I am extremely frustrated by this. And there’s no end in sight to this horrible customer service. There’s plenty for the IRS’s new “Chief Taxpayer Experience Officer,” Ken Corbin, to deal with.

The Looming AUR Disaster from Fraudulent Unemployment Insurance Claims

January 21st, 2021

A story I saw from a Sacramento television station noted that California’s Employment Development Department (EDD) processed millions of fraudulent unemployment insurance claims; indeed, EDD has no idea how many fraudulent claims were filed. EDD is now mailing out Forms 1099-G to note the unemployment paid (unemployment is taxable on the federal level). The Sacramento television station notes that individual who receive a fraudulent 1099-G from EDD should file a fraud claim with EDD so that (hopefully) EDD will issue a corrected 1099-G showing $0 paid in unemployment. Given it’s next to impossible to call EDD and reach a human, I wish you the best of luck in that.

But the story misses the point: Few, if any, of the fraudulent 1099-G’s will be received by the true holder of the social security number. Most of these fraudulent unemployment claims were filed with phony addresses, so the erroneous 1099-G’s being mailed out will be returned to the EDD.

Instead, what’s going to happen is that about 15 months after John & Jane Doe file their tax return (correctly noting their income), the Does will receive an Automated Underreporting Unit (AUR) notice alleging that they didn’t include their unemployment benefits from the EDD on their tax return. The Does will have to write to the AUR unit noting that the information is false. Will the AUR unit realize the issue? The AUR unit does a good job when you point out that the income was reported on the return (and the computer simply missed it). In my experience, the AUR unit does a poor job when you’re trying to show a tax form is wrong: proving a negative is difficult.

I suspect that non-Californians will have an easier time dealing with this issue than Californians. The AUR unit is far more likely to believe that the Does, living in (say) Illinois didn’t receive unemployment from California.

And it’s not just California that was victimized by this fraud. There were news stories of it here in Nevada, and I assume that other states were impacted, too. The fraud will likely lead to a lot of AUR notices in late 2022 to 2023.

SBA Releases New Simplified Forgiveness Form for PPP Loans

January 20th, 2021

When Congress passed the budget reconciliation act that contained the second Covid-related stimulus, one piece of the legislation was a simplified form for Paycheck Protection Program (PPP) loan forgiveness. Late yesterday, the Small Business Administration released the newest version of Form 3508S, the form that borrowers will need to complete.

This form can only be used if the amount of the PPP loan was $150,000 or less. The form is far easier to complete than the Form 3508EZ and should make applying for forgiveness far easier. It will likely be a few days before lenders are ready to accept the new Form 3508S. (One SBA website states that the Form 3508S can only be used for loans of $50,000 or less; that is wrong. I expect that website to also be corrected in the next few days.)

Nevada Tax Amnesty

January 18th, 2021

The Nevada Department of Taxation sent out an email with details on Nevada’s tax amnesty program. You’re thinking, “Taxes in Nevada? There are no income taxes in Nevada.” And that’s absolutely correct, but many businesses do pay taxes in Nevada. The amnesty covers:

Sales and Use Tax, Modified Business Tax, Cigarette Tax, Other Tobacco Products Tax, Liquor Tax, Bank Branch Excise Tax, Insurance Premium Tax, Tire Tax, Live Entertainment Tax (non-gaming), Short Term Lessor (Passenger Car Governmental Service Fee), Exhibition Facilities Fees, Commerce Tax, Transportation Connection Tax, Wholesale Marijuana Excise Tax, Retail Marijuana Excise Tax, Centrally Assessed Property Tax, and Net Proceeds of Mineral Tax.

The amnesty program doesn’t cover all taxes (lodging, real property transfer tax, and locally assessed property taxes are among the taxes not covered by the amnesty.

The amnesty program allows penalty and interest to be waived providing the outstanding tax delinquency meets the following criteria:

  1. The tax was due and payable on or before 6/30/2020, which includes:
    • All monthly tax returns due on or before June 30, 2020
    • All quarterly tax returns due on or before April 30, 2020
    • All annual tax returns due on or before January 31, 2020
  2. The delinquent tax amount is paid in full for the period. If a taxpayer has several delinquent returns but is only able to pay one or more periods, the penalty and interest may be waived for each period provided the tax was paid in full and;
  3. The delinquent tax is paid during the amnesty period of February 1, 2021 and May 1, 2021.

The amnesty begins on February 1st and runs three months. Interested taxpayers should read the Nevada Department of Taxation notice and the FAQ.