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First, Neteller is considered to be a foreign financial institution. If you have a foreign bank account, and have $10,000 or more in a foreign bank account(s) at any one time, you are required to file Form TD F 90-22.1 by June 30th of the following year with the Department of the Treasury and check the box at the bottom of Schedule B. If you have a foreign bank account and don't declare it, you can face civil and/or criminal penalties. Anyone who received $10,000 or more in one transaction from Neteller had a foreign bank account. I expect the Treasury Department to check their records and come after those who didn't declare their Neteller account. A few individuals may even face criminal prosecution over this, if they had extremely large transactions from Neteller.
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Yup, it does make sense footdr. Correct, NETeller is not a bank, it's a third party processor. I think that Mr. Fox's interpretation is that the IRS / DoT may consider a players NETeller account as a Foriegn Bank account. Not that we as players or the banks themselves consider NETeller a 'bank'.
Also, when you file Form TD F 90-22.1, and check the box at the bottom of Schedule B on your tax return, you are very likely to trigger an audit.
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As I've said many times, gambling income is taxable. The Tax Code isn't fair to gamblers, but the alternatives if you don't pay your taxes are worse than paying the tax that you owe.
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