triple x, i haven't forgotten your tax questions...waiting for the tax dir to call me

[NY Mane]

it is a busy time right now for tax people, but he will call me back...don't finish that tax return yet!

[t r i p l e X 71]

ok great thanks! i really appreciate it.

[skippy]

Is this guy connected to the Feds???

You certainly don't want this guy to leak info to the feds that quite a number of people are pulling in 5 digits from offshores.

Try and be as vague as possible.

[slipperypete]

Originally Posted by skippy

Is this guy connected to the Feds???

You certainly don't want this guy to leak info to the feds that quite a number of people are pulling in 5 digits from offshores.

Try and be as vague as possible.

i love being canadian lol...what do we have? mounties!? haha my sister has a horse too!

[NY Mane]

Skippy,

Who are you referring to? We are talking about Form 5478's and 1099's.

[skippy]

Originally Posted by NY Mane

Skippy,

Who are you referring to? We are talking about Form 5478's and 1099's.

I was referring to the tax dir you are awaiting a return call from.

[NY Mane]

he's not irs

[NY Mane]

Triple X,

My tax friend said he would be very very surprised if the bank did NOT send that form 5478 to the IRS. They do not need to tell you and you do NOT need to sign anything. If the checks were for big money then you probably need to declare it.

[t r i p l e X 71]

so i just go ahead and claim 20k -- how much would i expect to be taxed?

[NY Mane]

It really depends on your income (AGI = adjusted gross income). If you have a lot of deductions and credits that will help decrease your AGI which means less taxes. Don't forget to take the Phone Excise Credit. Everyone in the USA gets that credit. Your CPA or tax program will catch it.

I am making the sign of the cross for you right now. You just do not know how the IRS will accept gambling winnings. You have a paper trail so that is in your favor. You are being honest, that is in your favor. Wish I could help you. I do a lot of taxes this time of year for friends, family, associates and anyone who needs help.

[skippy]

Originally Posted by t r i p l e X 71

so i just go ahead and claim 20k -- how much would i expect to be taxed?

Just say you didn't know you had to claim that since technically, offshore gambling is not legal in the USA.

[NY Mane]

Triple,

Go to the website, www.irs.gov. The IRS provides free tax software. Select one and do a rough draft return BUT DO NOT eFILE IT OR ANYTHING.

If you have questions I will assist you. At least you can get an idea of what you might owe or be refunded.

[The Judge]

Originally Posted by NY Mane

You just do not know how the IRS will accept gambling winnings.

The IRS is more than happy to tax you on gambling earnings. There is even a 1099G form that you will have to sign for if you win over a certain amount at a casino. I hit a video poker jackpot a couple of years ago and declared it as income and was taxed accordingly. The IRS does not concern themselves with enforcing any perceived violations with regard to offshore gambling, they just want your tax dollars. Any CPA will tell you the same thing.

[NY Mane]

True, the bottom line is the #1 factor for the IRS.

But

There is a huge difference between a 1099G and Form 5478.

Based on my auditing experience (not IRS experience, but public and Corp auditing) I would consider the 1099G "an isolated incident." You were at a casino. The casino followed proper IRS guidelines. Everyone gets paid...next story or next tax return. As an auditor I cannot extend my testing because it stopped at the 1099G form. I can't think that your past returns are fraudulent because we would have a 1099G form. There is no bypassing this unless you cash in your chips in intervals, but that is something that cannot be dealt with.

Flipside...the Form 5478. This is an auditor's dream (in my opinion). It opens up so many more doors and questions. What other income is out there that is not reflected by a 5478? If he is making money through offshore channels, what cash income is he making from local, illegal channels? There is no "proper guideline" here. The bank made us aware of it.

Form 5478 is an information form. It is an FYI. You bypassed the "legal casino" modes of income (1099G) and now the banks have to report it.

Too much gray area here. It is not black and white. Not trying to scare anyone, but as a past auditor I would extend my testing and questions on a 5478 and not a 1099G.

[t r i p l e X 71]

i kinda feel uncomfortable reporting it as gambling earnings, anyway around it?