If you are a poker player and have an account at any of the online poker sites, you are considered to have a financial offshore account. I know that you are going to moan and groan, just as I did. Trust me, I did my homework before giving in. I researched and spoke with a leading International Tax Attorney in Atlanta and my conclusion is that where your account is not a bank account, it falls under the heading of other financial account. If you read the rules for what exactly a "foreign bank account" is, according to the IRS, your poker account is pretty much defined in there.So, what do you do? If you had $10,000 at any one time in all of your accounts combined during the past year, you are required to file Form 90-22.1. This form is due after the end of the year by June 30th and, it’s for every year that you had $10,000 or more (so start paying attention to your balances in 2009).
Because of all the things that the IRS has uncovered after getting their hands on offshore information, they are being nice (uh huh) and giving you a chance to come clean before they (possibly) nail you. That is why they are extending the due date from June 30th until October 15th (it was Sept. 23rd but they just announced another extension).
If you don’t file the Form, you could have penalties starting at $100,000. If you decide that you had better be safe than sorry, you need to have this filed by either yourself or someone knowledgeable (we charge $75 for this just as an FYI if you are shopping around). The Form requires all of your info, (i.e. full name, address and social), as well as the maximum balance you had, the name of the financial institution, its address, and your account number. That could be the funny part. Most of us don’t have account numbers, only screen names. I know some names are pretty hilarious and I can only imagine when someone looks at the account number and there is a rude screen name!
If you need help or have questions, feel free to contact me at annm@johnstoncpas.com or visit my website PokerDeductions.com. I have recently updated my Tax Q&A for the PocketFives community, so you may find your answers there.
Ann-Margaret Johnston, CPA
IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (a) avoiding penalties under the Internal Revenue Code, or (b) promoting, marketing or recommending to another party any transaction(s) or tax-related matter(s) addressed herein. This communication may not be forwarded (other than within the recipient to which it has been sent) without our express written consent.
* Ann-Margaret Johnston is an accomplished Certified Public Accountant in the United States who works specifically with poker players. She is the author of How To Turn Your Poker Playing Into A Business and wrote the Tax Q&A (last updated: September '09) exclusively for the PocketFives community. To learn more about Ann-Margaret and the contents of her book, please visit her site, PokerDeductions.com. (U.S. Tax Law only)
P5s Podcast: Ann-Margaret Johnston March 2009
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