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Tax Firms Warn IRS Cracking Down on Offshore Monies

Written by:
Jagajeet Chiba
Published on:
Jun/25/2009
IRS

Tax firms are now scrambling to comply with stricter regulations that require any clients who maintain monies offshore must file the proper forms and claim every last penny.  And this applies to those who gamble online, including poker players and sports bettors.

Gambling911.com first reported Thursday morning the urgency of this matter.

"They (the IRS) are really cracking down," said a tax accountant, who wished not to be identified or to have her firm identified. "Our firm represents a professional poker player who made it clear that he needs to file the 90-22.1 form."

Just this morning a letter was circulated throughout that firm.  Gambling911.com has exclusively obtained this letter:

Please read the attached letters ASAP. *** and **** - we need to discuss to determine how to communicate this to our clients. This is going to be a very time consuming process. I suggest that we cut and paste a letter to send to clients to notify us of any investments in such funds and supply us with the requested information on the form. I've been dealing with clients inquiring about this yesterday and today. People are concerned because of the significant penalties. *** - I took a call from the poker player yesterday that called for *** to ask about this. He is hearing in his circles that if he does online gambling, which he does, and the company is offshore that the account he has with that company is a commingled fund and now he is required to file as well. This is crazy.

And the penalty for failing to report: Up to $500,000 and up to 5 years in prison.

"That's the worst case scenario," said our tax expert.  "But a lesser punishment is no picnic either."

Many online poker players are on edge following news earlier this month that the US Government had seized $40 million of funds from payment processing firms doing business with the two largest Internet poker firms, PokerStars and Full Tilt Poker.

"Big Brother is definitely watching," said our tax expert.

Jagajeet Chiba, Gambling911.com         

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