FBAR Penalty Applies To Offshore Poker Account

By | June 20, 2014

FBAR Penalty Applies To Offshore Poker Account

A recent decision by the Federal District Court could put a chill into the numerous US poker and casino players who have in the past or continue to play with offshore companies.

In it, the government claimed that FirePay, PokerStars, and PartyPoker are all financial institutions because they function as “commercial bank[s].”

Because the taxpayer in question did not disclose these accounts and because they were foreign accounts reportable on a Report of Foreign Bank and Financial Accounts (FBAR) under 31 U.S.C. 5314 and subject to penalties under. 5321, the taxpayer was liable to pay significant penalties and interest.

What scrutiny this will now open up for Pokerstars and others is yet to be seen.

In light of the recently announced acquisition of Pokerstars by Amaya and in light of the fact that the new owners are looking to enter regulated markets (NJ, etc…) it will be interesting to see what further scrutiny will come to bear by the IRS and other government institutions on Pokerstars as they attempt to enter the US market as operators.

Will the US government ask operators like Pokerstars to disclose the name of all US poker players that have held accounts over $10,000 with them over the past years? What about the poker players themselves, should they visit their accountants and lawyers soon?

It is one thing when Pokerstars was a private company and beyond the reach of US authorities. It is another thing when the new owners are public companies seeking US regulation by State governments.

Let’s see how this develops….

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FBAR Penalty Applies To Offshore Poker Account.

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Alex Igelman

Alex Igelman is a gaming lawyer and consultantbased in Toronto, Ontario, Canada. In 2007,Alex Igelman foundedGaming Research Partners, a full servicegaming and eSports consultancy that specializes in research and business development.
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