Neteller, the DOJ, and the IRS

Form TD F 90-22.1 is for all foreign financial accounts, which in my opinion would include Neteller. On the positive side, you only have to file TD F 90-22.1 if you had more than $10000 in your foreign accounts at any time.

The taxation of gambling winning in the US quite complicated, because winnings (not defined precisely) count as income, but losses up to the amount of your winnings can only be deducted as itemized deductions, so if you don't itemize, you lose out. Even if you do itemize, you may still lose, because you AGI may be higher.
 
5.How many people who occassionly win in vegas, claim in on their taxes.
Any single win over $1199 will trigger a W-G Form which a copy is sent to IRS regardless of the amount of bet. For horse racing, anything over $600 on a $1 bet will trigger a W-G Form.

If you do not claim any winnings and the IRS has a W-G form filed under your name..you will be audited and a hefty fine will be imposed. Nothing to fool with, for the IRS has no time frame in which they can come back to you and audit you on gambling winnings. I play it safe...I claim everything that is required but I get to write off every penny too by requesting a copy of play for the year from the casinos and the track for my records.

Don't fool with the man is the saying..for once fooled he goes for the jugular...:lolup:
 
I am going to jail. Simple as that I think. My husband will freak out if we get audited so it is best I just sit in jail and rot for my sins.

For the first time in my adult life I fear my own government. Damn that is so sad. If I wasn't so mad I might worry.

You are so right CM they are "goosestepping" down Mainstreet USA as we speak!
 
For the first time in my adult life I fear my own government. Damn that is so sad. If I wasn't so mad I might worry.
Damn sad to say, but I am beginning to understand how the people of Berlin Germany felt in 1935.
 
The DOJ and the IRS are separate entities and are not supposed to share information with each other.
 
Agencies will not sahre information on a mass level, if disallowed by the law.
The interests of the various agencies are not always the same.

I think we need someone with more knowledge about the law the the practice.

The DOJ and the IRS are separate entities and are not supposed to share information with each other.

And you actually believe that they don't?
 
Agencies will not sahre information on a mass level, if disallowed by the law.
The interests of the various agencies are not always the same.

I think we need someone with more knowledge about the law the the practice.

They're above the law. Recent events show this. They'll share info with whomever they want. Have you ever hard of a loophole? Shit like this happens everyday. Welcome to the USA.
 
They're above the law. Recent events show this. They'll share info with whomever they want. Have you ever hard of a loophole? Shit like this happens everyday. Welcome to the USA.

But the interests of various parties in the agencies are not alwasy the same. the specific guys handling this case at the DOJ may have higher priorities than helping the IRS.

Besides, they are not always ignoring the law. Sometimes they do abidce the law.
 
The DOJ and the IRS are separate entities and are not supposed to share information with each other.



Tax Myth #9.

The IRS doesnt share information with state tax agencies.

Absolutely false.

The IRS and state tax agencies actively share information. As far as I know the only state that does not share information with the IRS is Nevada. You can find a description of the information sharing program here
(link:
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.


Tax Myth #12.

The IRS cant share information from my tax return with other government agencies because of the Silver Platter doctrine.

Another falsehood.

As noted above, the IRS routinely shares information with state tax agencies. In Garner v. United States (424 U.S. 648 (1976)) the Court held that the occupation listed on a tax return can be shared. If you are foolish enough to list your occupation on your tax return as illegal drug dealer, the IRS can forward your name to other law enforcement agencies.


The U.S. Tax Code is complex. Its unfair to gamblers. Parts of it are just plain stupid. But its the law. And when you break the law, there are consequences. Its a whole lot easier to pay your taxes now than to wait for the IRS to find you and pay taxes, interest, penalties, and possibly find your way to prison.

FROM : Tax Myths for the Poker Player
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DUE TO 911 THE FEDS HAVE CARD BLANCHE

Wire taps, busting into your home with no warrant, and keeping "secret" files on citizens, is all legal now. BUT, the statutes that allow this, that were enacted after 911; were implemented to allow the government to "investigate terrorists" when they have probable cause to believe a Citizen is connected to terrorist groups.

PROBABLE CAUSE IS THE WAY LAW ENFORCEMENT GETS AWAY WITH DEPRIVING US OF DUE PROCESS AND OUR CIVIL RIGHTS.

And the Banks Secrecy Act allows them access to our personal financial accounts, without subpeona or warrant.

The U.S. Supreme Court is chipping away at our constitutional rights!

The Laws are constantly being amended by the Fed and State government to make it easier for the prosecution to convict and harder for citizens to defend themselves. "driving while intoxicated" laws are a good example. Basically, they now need no real proof to arrest you. EVEN IF YOUR BREATH TEST(that you can't refuse, because that is an additional charge/penalty)is below the Legal Limit of .08. Theycan still arrest for probable cause.
So, If you are .08 or above the Law says you are LEGALLY intoxicated BUT if you are .under .08 IT DOESNT PROVE YOU ARE NOT INTOXICATED. The test is required for evidence making it easier on the prosecution. Wow they have their cake and eat it to. Plus, they take your license on the spot, before you have a chance to defend yourself in court, and even if you did not appear to be driving in an intoxicated manner and were mearly stopped for minor traffic offense, Blood Shot Eyes, Smell of Alcohal on your PERSON, equals enough to arrest you. I HAVE HAD IT WITH THIS POLICE STATE. I know it is better than many Countries but the Government has over stepped its bounds and the Constitution is HISTORY. Having a couple of drinks at dinner , etc. does not=Drunk Driving. I've followed many a DRUNK driver to get their license plate number and phone the police. Believe me, there was no question that they were either drunk or on drugs. Unfortunately, the police never responded soon enough to my calls and most of them got away by running stops signs, high speed, running up on sidewalks(Im not kidding) I couldnt keep up with them. I call the police with the license plate of a REAL. DRUNK, dangerous driver and they do nothing. Just one of the 100's of unjust laws.

So, I would have to say WE HAVE NO RIGHTS and clearly are guilty until proven innocent!
 
Tax Myth #12.

The IRS cant share information from my tax return with other government agencies because of the Silver Platter doctrine.

Another falsehood.

As noted above, the IRS routinely shares information with state tax agencies. In Garner v. United States (424 U.S. 648 (1976)) the Court held that the occupation listed on a tax return can be shared. If you are foolish enough to list your occupation on your tax return as illegal drug dealer, the IRS can forward your name to other law enforcement agencies.

Does anyone remember the case a couple of years ago of a fellow who filed his online winnings on his income tax, and then later was arrested for illegal gambling, but in the end only fined something like $500 (heaven only knows what he spent on lawyers and court fees) ? I can't remember any further specifics to help me google for the article.
 
Wire taps, busting into your home with no warrant, and keeping "secret" files on citizens, is all legal now. BUT, the statutes that allow this, that were enacted after 911; were implemented to allow the government to "investigate terrorists" when they have probable cause to believe a Citizen is connected to terrorist groups.

Among the worst seven provisions of the bill are the following.
1. The FBI can secretly enter someone's home or office, search the premises, and leave without notifying the owner. In theory, this would be supervised by a court. However, the notification of the secret search "may be delayed" indefinitely (Section 213). This is, of course, a complete violation of the Fourth Amendment, which prohibits "fishing expeditions" and guarantees the right of the people to be "secure in their persons, houses, papers, and effects, against unreasonable searches and seizures." All the federal government must do to suspend your Fourth Amendment rights is accuse you of terrorism.

2. Any U.S. attorney or state attorney general can order the installation of the FBI's Carnivore surveillance system. As reported before, this system records all e-mail correspondence and the addresses of Web pages visited by a specific target. Previously, there were legal restrictions on Carnivore and other Internet surveillance techniques (Section 216). Even more troubling, Fox News has reported that the FBI plans to go beyond the authorization of the new bill and change the very architecture of the Internet. The FBI wants to route all net traffic through central servers for monitoring. While this will require the voluntary compliance of the major ISPs, most experts agree that they will quickly cave into these demands for fear of appearing uncooperative or unpatriotic.

3. An accused terrorist who is a foreign citizen can be held for an unspecified series of "periods of up to six months" with the attorney general's approval. He doesn't have to be charged and he may be denied access to an attorney (Section 412). In effect, this provision suspends any due process provisions of the Constitution, especially the Fifth Amendment which states that "no person [shall] be deprived of life, liberty, or property without due process of law." While the provision of this bill only applies to foreigners, it sets a dangerous precedent and could easily be used in the future against U.S. citizens accused of domestic terrorism.

4. Foreigners who enter the U.S. on a visa will be subjected to biometric technology, such as fingerprint readers or iris scanners. This will become part of an "integrated entry and exit data system" (Section 414). My fear is that eventually all Americans will be forced to submit to this technology. This bill will put the infrastructure in place. In will then be a simple step to require all citizens to participate in this system. Failure to do so may result in the inability to travel or even to buy and sell merchandise or property.

5. Without a court order, the FBI can require telephone companies and Internet service providers to turn over customer records. All they have to do is claim that the "records sought are relevant to an authorized investigation to protect against international terrorism." Worse, the company contacted may not "disclose to any person" that the FBI is doing an investigation (Section 505). The bill of rights was written to protect citizens from exactly this kind of abuse. This provision of the new law completely throws out the presumption of innocence doctrine that is central to our system of justice. Now anyone can be treated as a criminal if they are merely accused of a crime.

6. Without a court order, credit reporting agencies must disclose to the FBI any information that agents request in connection with a terrorist investigation. The agencies may not disclose to the subject that the FBI is snooping in their file (Section 505). Again, there is no presumption of innocence and the suspect is denied his due process rights. This gives government agents the authority to spy on anyone's financial activities. All they have to do is make the accusation of terrorism and the door swings wide open.

7. The current definition of terrorism is expanded to include biochemical attacks and computer hacking. Some current computer crimes such as hacking a U.S. government system or breaking into and damaging any Internet-connected computer are also covered (Section 808). While these are no doubt crimes and should be prosecuted, by classifying them as "terrorist activities," suspects are subject to having their rights radically curtailed, as I have outlined above. If convicted, they are subjected to extremely stiff penalties. Prison terms range between five and 20 years (Section 814).

More specifically, Section 203 (Authority to Share Criminal Investigative Information) allows information gathered in criminal proceedings to be shared with intelligence agencies, including but not limited to the CIA in effect, say critics, creating a political secret police. No court order is necessary for law enforcement to provide untested information gleaned from otherwise secret grand-jury proceedings, and the information is not limited to the person being investigated.

Furthermore, this section allows law enforcement to share intercepted telephone and Internet conversations with intelligence agencies. No court order is necessary to authorize the sharing of this information, and the CIA is not prohibited from giving this information to foreign-intelligence operations in effect, say critics, creating an international political secret police.

The concern here is about the third branch of government. One of the overarching problems that pervades so many of these provisions is reduction of the role of judicial oversight. The executive branch is running roughshod over both of the other branches of government. I find it very bothersome that the government is going to have more widespread access to e-mail and Websites and that information can be shared with other law-enforcement and even intelligence agencies. So, again, we're going to have the CIA in the business of spying on Americans something that certainly hasn't gone on since the 1970s when the illegal investigations of thousands of Americans under Operation CHAOS, and the spying carried out by the CIA and National Security Agency against U.S. activists and opponents of the war in Southeast Asia.

Nor do the invasion-of-privacy provisions of the new law end with law enforcement illegally searching homes and offices. Under Section 216 of the USA PATRIOT Act (Modification of Authorities Relating to Use of Pen Registers and Trap and Trace Devices), investigators freely can obtain access to "dialing, routing and signaling information."

While the bill provides no definition of "dialing, routing and signaling information," the ACLU says this means they even would "apply law-enforcement efforts to determine what Websites a person visits." The police need only certify the information they are in search of is "relevant to an ongoing criminal investigation."

This does not meet probable-cause standards that a crime has occurred, is occurring or will occur. Furthermore, regardless of whether a judge believes the request is without merit, the order must be given to the requesting law-enforcement agency, a veritable rubber stamp and potential carte blanche for fishing exhibitions.

Additionally, under Section 216, law enforcement now will have unbridled access to Internet communications. The contents of e-mail messages are supposed to be separated from the e-mail addresses, which presumably is what interests law enforcement. To conduct this process of separation, however, Congress is relying on the FBI to separate the content from the addresses and disregard the communications.

In other words, the presumption is that law enforcement is only interested in who is being communicated with and not what is said, which critics say is unlikely. Citing political implications they note this is the same FBI that during the Clinton administration could not adequately explain how hundreds of personal FBI files of Clinton political opponents found their way from the FBI to the Clinton White House.

And these are just a few of the provisions and problems. While critics doubt it will help in the tracking of would-be terrorists, the certainty is that homes and places of business will be searched without prior notice. And telephone and Internet communications will be recorded and shared among law-enforcement and intelligence agencies, all in the name of making America safe from terrorism.:mad:
 
That is absolutely chilling - sounds like the old USSR.

1. The FBI can secretly enter someone's home or office, search the premises, and leave without notifying the owner. In theory, this would be supervised by a court. However, the notification of the secret search "may be delayed" indefinitely (Section 213).

And the capper for #1 is that the court supervision is overseen by a "Secret Court" that may grant "retroactive" warrants. i.e. warrants after the fact of the search...not that it'd matter anyway since there is no provision for FISA to notify you anyway so if they don't want you to know...you won't..

In a highly restricted room inside the Department of Justice Building in Washington D.C. resides a federal court that meets in complete secrecy. Even though the rulings this secret court issues may result in criminal charges, convictions and prison sentences for US citizens, their writs and rulings are permanently sealed from review by those accused of crimes and from any substantive civilian review. This is the Foreign Intelligence Surveillance Court (FISC), which considers surveillance and physical search orders from the Department of Justice and US intelligence agencies. During the 20-year tenure of the FISC the court has received over 10,000 applications for covert surveillance and physical searches. To date, not a single application has been denied.

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A couple more articles on the NETeller debacle from Russell Fox's website. The tax information is outdated, but still informative, and could possibly help forum members.

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More on Neteller Posted by Russ on Wednesday March 21, 2007 at 7:15am.

Neteller, the beleaguered Isle of Man financial intermediary firm whose two founders were arrested on money laundering charges in the United States, announced that they have come to an agreement with the US Attorney's Office for the Southern District of New York (where the potential prosecution will take place). While it's very unlikely the agreement with the DOJ will be made public, Neteller's press release notes that:

* Within the next 75 days (by June 4th) they will announce a plan for the return of funds of their American customers;

* A consulting firm, Outdated URL (Invalid), will, according to the press release, "...provide a report to the USAO on the Groups current financial condition."

* Neteller "is continuing to cooperate with the USAOs investigation, under the advice of its legal advisers and in accordance with court orders in the Isle of Man"

So what does this mean for a Neteller customer?

1. Neteller is cooperating with the US Attorney's Office (the Department of Justice). What is the DOJ interested in? Money laundering, of course. Large accounts with activity. Individuals (and entities) that haven't reported their foreign bank accounts. Individuals and entities that haven't filed tax returns on income earned overseas.

2. If you have a Neteller account, and you had $10,000 in it at any time during 2006, you should make sure that you mark the box on Schedule B of your tax return that indicates you have a foreign bank account. The IRS will likely, by year-end, have balance information on every Neteller account. You also need to file Form TD F 90-22.1 with the Department of the Treasury (not the IRS) by June 30, 2007.

3. If prior to 2006 you had $10,000 at Neteller and you didn't file the TD F 90-22.1, you should consider filing it today, attaching a note that says you weren't aware of the law requiring notification of a foreign bank account. The penalty for not filing the form is $10,000 (minimum), and it's a felonyyou can go to prison for this. Do realize you are likely going to have your tax return audited, but if you're choosing between an audit and jail time, I know which one I'd choose.

4. A client asked me over the weekend when I thought he'd see his Neteller funds. I told him late Summer or Fall. I think a July to September time frame is a reasonable estimate.

So the Neteller saga continues, but the ending is clear. American customers will almost certainly see their funds this year, and the DOJ (and later, the Treasury Department and the IRS) will see Neteller's records this Spring or Summer.



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Neteller and Constructive Receipt

Posted by Russ on Tuesday March 27, 2007 at 8:39pm.


As the saga of Neteller, the Isle of Man based financial intermediary, drags on, I've gotten many questions regarding the money that's tied up. For those who are unaware, some of the Neteller money was seized by the US government as it was moving over the wires between Neteller's banks and customers' banks, and some is sitting in customer accounts at Neteller. All of it, though, remains out-of-reach of American customers of Neteller. So the question is, do customers of Neteller have to pay tax on gambling proceeds won in 2006 that are stuck at Neteller?

Yes.

When an American must pay tax on income is governed by the doctrine of "constructive receipt." Suppose you gamble on an online poker site, and you win $1000. However, right when you win that money the poker site goes out of business, and you never collect a penny of the $1000. You've never had access to the moneyyou never were able to use it. You didn't have constructive receipt of the money.

Now suppose you win $1000 on December 31, 2006, and the money is immediately put in your account. On January 16, 2007, you withdrew the money into Neteller. You immediately requested Neteller to transfer the money into your American bank account. On January 17th that money was either seized or is stuck at Neteller.

That individual has $1000 of gambling income in 2006. The gambler could have withdrew the money on January 1, 2007 or he could have gambled with it on January 1. He had constructive receipt of the money. That he was unlucky in that the money was seized or stuck at Neteller is unfortunate. He or she must pay tax on the $1000.

So what should an individual do who has significant funds stuck at Netellerso significant that he may not be able to pay what he owes in taxes? Talk to a professional tax advisor now; don't wait until April 10th. Most tax preparers are very busy between now and April 17th. We're not (in general) going to be able to give you specific advice if you wait until the very last minute.

Realize that you owe the money. Find out what your total tax is (including your state income tax, if applicable). Determine what you can afford to pay. Options include going on extension and installment plans. But not filing a tax return (or at least an extension) by April 17th will subject you to the failure to file penalty!

The phrase caveat emptor (let the buyer beware) applies to many offshore entities. The IRS considers online gambling to be just another tax avoidance scheme,
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. They're not going to be very sympathetic to taxpayers using a financial intermediary that serviced offshore online gambling firms.
 
I'm tacking this on here as I didn't want to start yet another thread...

Did the NETeller Two go back to court (or get another delay) yesterday? Or is that today??
 
I'm tacking this on here as I didn't want to start yet another thread...

Did the NETeller Two go back to court (or get another delay) yesterday? Or is that today??


I haven't seen the exact date of their next court appearance. The news reports following the May 16 hearing said there was a 2 week extension, but didn't give the actual date and there hasn't been anything reported since as far as I can see. One story I recall said it would be the first week of June.
 
Update

NETELLER FOUNDERS STILL UNTRIED

Sixth continuance pushes trial date back another month

Neteller founders Stephen Lawrence and John Lefebvre will remain untried for a further month, according to a statement this week by the public information officer for the US District Attorney's Office in New York, where both men are on massive $5 million bail and restricted to movement within the state.

The Neteller duo, both Canadian citizens, were arrested by federal agents whilst on US soil back in January this year, subsequently released on heavy bail and have since been the subject of repeated continuances. Their arrest sparked the withdrawal of the Isle of Man based Neteller from the US market, freezing US player accounts, a situation that persists today.

No further details were available as we went to press, but the latest delay will mean the trial of the two men is unlikely to take place before the end of June...and there could be further delays when that date is reached.
 
Good god... if the DoJ doesn't have enough to prosecute, let the two go. This is insane....

My suspicion is that the DoJ just want to keep Stephen Lawrence and John Lefebvre under lock and key till they (DoJ) kill as much online gambling as possible, and then, end up charging Lawrence and Lefebvre with something comparatively minor and letting them go.
 
Earlier records then?

You are talking about 2006 but what about the years before 2006?

2004....2005..

Will neteller give out that data as well? I think there is many ppl in the USA that haven't reported their casino wins thoose years..
 
I'm not sure what to think about this...
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is basically about a judge ruling against e-Gold --I guess I'd forgotten or never knew that the US had frozen and seized funds there, too-- however down in the next to last paragraph it says:

In the recent NETeller founders case, the $50+ million in frozen US client funds was eventually stamped as released by the DOJ after a plea agreement with the defendants.

Oh? Really? I love mysterious comments with no real info. Not! (And I am still stumped as to how the US continues to hold the men hostage, with no trial, and meanwhile both parties seem to be using US customers and their money as a bargaining chip.)

Anyway, JetSet, maybe you can contact this Mark Herpel guy and find out what the devil he's talking about.
 
The guy made an honest mistake, which he has corrected:

QUOTE:
Dear Brian,

My apologies, this sentence was a very serious blunder on my part. I have several pending criminal actions we've been following and writing about...that sentence was just a mistake.

That paragraph was removed earlier today. Again, that was a bad mistake on my part as the company NETeller has come to an arrangement NOT the defendants.

I appreciate your letter, however it was fixed earlier today. All the best to you.

Thanks again.

Mark Herpel

UNQUOTE
 

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