The Financial Crimes Enforcement Network (FINCEN) published revised regulations for the Report of Foreign Bank and Financial Accounts (FBAR) in the Federal Register today. Poker accounts were reportable because they were pooled accounts with the money held in one central account (fund). However, the new rules change the accounts that must be reported:
(c) Types of reportable accounts. For purposes of this section—
(1) Bank account. The term ‘‘bank account’’ means a savings deposit, demand deposit, checking, or any other account maintained with a person engaged in the business of banking.
(2) Securities account. The term ‘‘securities account’’ means an account with a person engaged in the business of buying, selling, holding or trading stock or other securities.
(3) Other financial account. The term ‘‘other financial account’’ means—
(i) An account with a person that is in the business of accepting deposits as a financial agency;
(ii) An account that is an insurance or annuity policy with a cash value;
(iii) An account with a person that acts as a broker or dealer for futures or options transactions in any commodity on or subject to the rules of a commodity exchange or association; or
(iv) An account with—
(A) Mutual fund or similar pooled fund. A mutual fund or similar pooled fund which issues shares available to the general public that have a regular net asset value determination and regular redemptions; or
(B) Other investment fund. [Reserved]
Now, poker accounts are pooled accounts but no shares are issued to the public. As I read this, poker accounts will no longer have to be reported as foreign financial accounts. Do note that third party payment services, such as Neteller and Moneybookers, will still need to be reported (as will foreign bank accounts).
I’m going to read the Federal Register post again to make sure I’m reading this right, but I believe I am.
UPDATE: I’ve now re-read the regulations in the Federal Registry. In no way can a poker account be considered an account with shares sold to the public, or with regular net asset value determinations. Poker accounts no longer have to be reported as foreign financial accounts.
Tags: FBAR
[…] Re: Taxes on Poker Winnings Part 3 UPDATE: The Financial Crimes Enforcement Network (FINCEN) this morning (February 24, 2011) released new guidelines for the FBAR. Poker accounts are no longer considered foreign financial accounts that must be reported. Do realize that foreign bank accounts and third-party services (i.e. Neteller, Moneybookers) still must be reported. I have more on this on my tax blog. […]
[…] For accounts with offshore online casinos, the pertinent language is in (c)(3)(iv), which is part of the definition for “other financial account.” Now focus on “pooled fund.” Those who deposit funds with an online casino have their funds pooled with funds of the other patrons. Until these regulations became final, the consensus was that offshore online casino accounts were subject to FBAR rules. Why? Because the language following pooled fund, “which issues shares available to the general public,” was not in the old regulations. Now, as you can see, they are. For online poker players, this is good news. Russ Fox also explains. […]
[…] this story from Russ Fox’s Taxable Talk blog reports that changes in regulations published by the The Financial Crimes Enforcement Network […]
[…] I found this just by doing a google search on the topic. Other webpages can be found also http://www.taxabletalk.com/2011/02/2…oker-accounts/ […]
Hello,
Do I need to report my sportsbooks accounts on FBAR?
How about moneybookers skrill account? Is skrill a foreign financial institution?
Regards
Sportsbook accounts are not considered foreign financial accounts. However, Moneybookers and other third party payment processors are considered foreign financial accounts.
thanks
do sportsbook accounts need to be reported on SCHEDULE B??
How about on form 8938?
No, sportsbook accounts don’t for either the FBAR or Form 8938. The definition of a reportable financial account is identical for both. (Do note that the qualifying criteria for balances is very different for Form 8938 from the FBAR, though.)
thanks
so even if the sportbook balance is over 50K there is no need to file form 8938, correct?
the reason i ask is because of the article you had posted:
http://www.taxabletalk.com/2011/06/15/son-of-fbar-now-looks-uglier-for-2012
in that article you wrote:
“As best as I can tell, this form will apply for all foreign assets, and all money maintained outside of the United States. This will include online gambling accounts, so for those who no longer have to file the FBAR, you may have to file the Son of FBAR.”