Online Gambling and Cryptocurrency Addresses for 2022

Posted on February 22, 2022 by Russ

[This listing has been replaced by the 2023 listing.]

If you have one or more foreign financial accounts and you have $10,000 aggregate in those account(s) at any time during 2019, you must file the Report of Foreign Bank and Financial Accounts (the “FBAR”). This is Form 114 from FINCEN. (The IRS and FINCEN now allege that foreign online poker accounts are “casino” accounts that must be reported as foreign financial accounts. The rule of thumb, when in doubt report, applies—especially given the extreme penalties.) You also should consider filing an FBAR if you have $10,000 or more in a non-US Cryptocurrency Exchange.

There’s a problem, though. Most of these entities don’t broadcast their addresses. Some individuals sent email inquiries to one of these gambling sites and received politely worded responses (or not so politely worded) that said that it’s none of your business.

Well, not fully completing the Form 114 can subject you to a substantial penalty. I’ve been compiling a list of the addresses of the online gambling sites. It’s presented below.

FINCEN does not want dba’s; however, they’re required for Form 8938. One would think that two different agencies of the Department of the Treasury would speak the same language…but one would be wrong.

You will see the entries do include the dba’s. Let’s say you’re reporting an account on PokerStars. On the FBAR, you would enter the address as follows:

Rational Intellectual Properties Limited
Douglas Bay Complex, King Edward Rd
Onchan, IM31DZ Isle of Man

Here’s how you would enter it for Form 8938:

Rational Intellectual Properties Limited dba PokerStars
Douglas Bay Complex, King Edward Rd
Onchan, IM3 1DZ Isle of Man

You will also see that on the FBAR spaces in a postal code are removed; they’re entered on Form 8938. You can’t make this stuff up….

Finally, I no longer have an address for Bodog. If anyone has a current mailing address, please leave it in the comments or email me with it.

Foreign cryptocurrency exchanges with just cryptocurrency do not have to be reported on the FBAR. However, if the account holds anything else (such as ‘fiat’ currency like US dollars, Euros, etc.) the account is reportable.

There is no dispute, though, about reporting foreign cryptocurrency exchanges on Form 8938: They must be reported on Form 8938 (if you have a Form 8938 filing requirement).

Note: This list is presented for informational purposes only. It is believed accurate as of February 22, 2022. However, I do not take responsibility for your use of this list or for the accuracy of any of the addresses presented on the list.

The list is in the cut text below.

The list is in alphabetical order by the common name (not the legal name) of the gambling site. An entry is:

Common Name
Legal Name
Address
City, State/Territory, Postal Code, Country

Note that not all entities have states/territories or postal codes.

IMPORTANT: When reporting on Form 114, the dba’s are not included. When reporting on Form 8938, the dba’s are included.

10Bet
Ocean Star Limited dba 10bet.com
Dragonara Business Center, 5th Flr, Dragonara Rd
St. Julians, STJ3141, Malta

12Bet (except U.K.)
Pacific Sea Marketing International Ltd. dba 12bet.com
MillMall, Ste 6, Wickhams Cay 1, PO Box 3085
Road Town, Tortola, British Virgin Islands

12Bet (U.K.)
TGP Europe Limited dba 12bet.uk
22A Castle St
Douglas, IM1 2EZ, Isle of Man

188Bet
Cube Limited dba 188bet
Ground Floor, St. George’s Court, Upper Church St
Douglas, IM1 1EE, Isle of Man

5dimes
5Dimes Casino and Sportsbook
Edificio Equus
San Jose, Costa Rica

888poker (except U.K.)
Virtual Digital Services Limited dba 888 Poker
Level G, Quantum House; 75, Abate Rigord St
Ta’Xbiex, XBX1120, Malta

888poker (U.K.)
888 UK Limited dba 888 Poker
Ste 601-701, Europort
Gibraltar, Gibraltar

AA Poker
Memoriki Limited dba AA Poker
18/F, Star Centre, 35 Hung To Rd, Kwun Tong, Kowloon
Hong Kong, Hong Kong

America’s Cardroom
BMX Entertainment dba America’s Cardroom
71C Georgio A, Office 3, Germasogeia
Limassol, 4047, Cyprus

Asianconnect88
Asianconnect N.V. dba Asianconnect88
E-Zone Beheer van Engelen N.V., Van Engelenweg 21A
Willemstad, Curacao (Netherlands Antilles)

BestPoker
Best Global N.V. dba Best Poker
BS Building, Level 1, Triq Il-Mosta,
Lija, LJA 9012, Malta

Bet365
Bet365
Hillside, Festival Way, Stoke-on-Trent
Staffordshire, ST1 5SH, United Kingdom

Betanysports Casino and Sportsbook
Betanysports Casino and Sportsbook
Edificio Equus
San Jose, Costa Rica

Betclic
Managas Gaming Malta Limited dba Betclic
Level 3, Tagliaferro Business Center; High St c/w Gaiety Ln
Sliema, SLM1551, Malta

Betcoin.ag
Global Limiting Holding EOOD dbaBetcoin.ag
Nikola Vaptsarov Blvd
Sofia, Bulgaria

BetCris
TV Global Enterprises Ltd dba BetCris
Villa Seminia, 8 Sir Temi Zammit Ave
Ta’Xbiex, XBX1011 Malta

BETDAQ
LC International Limited dba BETDAQ
Ste 6, Atlantic Suites
Gibraltar, Gibraltar

BETDSI
Diamond Sportsbook International dba BETDSI
Santa Ana
San Jose, Costa Rica

Betfair
PBB Counterparty Services Limited dba Betfair
Triq il-Kappillan Mifsud
St. Venera, SVR1851, Malta

Betfred
Petfre (Gibraltar) Limited
5/2 Waterfront Place
Gibraltar, Gibraltar

Betmost Poker
WHG (International) Limited dba Betmost Poker
6/1 Waterfront Place
Gibraltar, Gibraltar

Betonline
BLS International dba Betonline.ag
cs@betonline.ag
Panama City, Panama

Betsafe
BML Group Ltd Limited dba Betsafe Poker
Betsson Experience Center, Ta’Xbiex Seafront
Ta’Xbiex, XBX1027, Malta

Bettson
BML Group Ltd dba Bettson
Betsson Experience Center, Ta’Xbiex Seafront
Ta’Xbiex, XBX1027, Malta

BetUS
Firepower Trading Ltd dba BetUS
Anthinodorou, 3 Dasoupoll, Strovolos
Nicosia, 2025, Cyprus

betusa.ag
Online Management Services dba betusa.ag
Jasmine Ct, Ste 17, Friar’s Hill Rd
St. Johns, Antigua

BetVictor
Victor Chandler International Ltd dba BetVictor
Ste 23, Portland House, Glacis Rd
Gibraltar, Gibraltar

Binance
Binance Marketing Services Limited
C85602 Melita Ct, Level 3, Triq Giusseppe Cali
Ta’Xbiex, XBX1420, Malta

Bitfinex (non-US users)
BFXNA Inc dba Bitfinex
Ste 13/F, 1308 Bank of America Tower, 12 Harcourt Rd, Central
Hong Kong, Hong Kong

Bitfinex (US users)
Finex Inc. dba Bitfinex
Chaucer Group Limited, 10 Lower Thames
London, E3R 6E14, United Kingdom

BitMax.io
BitMax.io
114 Lavender St, #09-88, Ct Hub 2
Singapore, 338729, Singapore

BitMex
100x Grouop dba BitMex
Second Flr, Capital City, Independence Ave, PO Box 1008
Victoria, Mahe, Seychelles

Bitrue
Bitrue Singapore Pte. Ltd.
73 Upper Paya Lebar Rd, #06-01C, Centro Bianco
Singapore, 534818, Singapore

Bitstamp
Bitstamp Ltd.
5 New Street Square
London, EC4A 3TW, United Kingdom

Black Chip Poker
BMX Entertianment S.A.
Sabana Sur, Edificio La Colmena Contigo a Grupo Sama
San Jose, Costa Rica

Blockchain
Blockchain.info
Rue de Merl, 741, Rue Phillipell
Luxembourg, 2340, Luxembourg

Bluetrade.com
Bleu Digital Enterprises Ltd
527, St. Paul’s St
St. Paul’s Bay, Malta

Bodog
Bodog
service@bodog.eu
Manila, Philippines

Bookmaker.eu
Costa Rica International Sports dba Bookmaker.eu
Edificio La Colmena; 75m W Contraloria de la Sabana Sur
San Jose, Costa Rica

Bovada
Lynton Limited Ltd dba Bovada
Craig Plaza, 51-55, Fountain St
Belfast, BT1 5EB, United Kingdom

Boylesports
Boylesports Ltd
Finnabair Industrial Estate, Dundalk
County Louth, Ireland

Bwin
ElectraWorks Limited dba BWIN
Ste 6, Atlantic Suites, Europort Ave
Gibraltar, Gibraltar

Cafe Casino
Lynton Limited dba Cafe Casino
Craig Plaza, 51-55 Fountain St
Belfast, BT1 5EB United Kingdom

Carbon Poker
PDC Global Collections Ltd dba Carbon Poker
19/21 Circular Rd
Douglas, Isle of Man

CaribSports
Carib International Entertainment Ltd dba CaribSports
35 New Rd
Belize City, Belize

Cashpoint
Cashpoint (Malta) Ltd.
Level 1, Salvu Psaila St
Birkirkara, BKR9077, Malta

Casino77
Mandarin Gaming NV dba Casino 77
Soho Office 3A, Edge Water Complex, Elia Zammit St
St. Julians, Malta

Celeb Poker
Wizplay OS (Cyprus) Limited dba Celeb Poker
Flat 22, 6 Tassou Papadopolou St
Agios Dometios, Nicosia, 2372, Cyprus

Celsius Network Limited
Celsius Network Limited
The Harley Bldg, 77-79 New Cavendish St
London, W1W 6XB, United Kingdom

CEX
CEX.io Ltd
24th Flr, One Canada Square, Canary Wharf
London, E14 5AB, United Kingdom

Click and Buy
Click and Buy International Ltd
6-9 Cynthia St
London, N1 9JF United Kingdom

Cloudbet
Halcyon Super Holdings BV dba Cloudbet
Pareraweg 45
Willemstad, Curacao

CoinEgg Ltd
CoinEgg Ltd
38 Hunstanton Ave
Birmingham, B17 8TA, United Kingdom

Coinmate
Confirmo Ltd. dba Coinmate
The Shard Floor 24/25, 26 London Bridge St
London, SE1 95G, United Kingdom

ComeOn! Poker
Co-Gaming Limited dba ComeOn! Poker
3rd Flr, Spinola Park, Tirq Mikiel Ang Borg
St. Julians, SPK1000, Malta

Coral Poker
Gala Interactive (Gibraltar) Ltd dba Coral Poker
Ste 6, Atlantic Suites
Gibraltar, Gibraltar

Crypto.com
Foris Dax, Inc. dba crypto.com
Unit 1506-07, 15/F, Pacific Plaza 418, Des Voeux Rd W
Hong Kong, Hong Kong

Crypto.games
MuchGaming B.V. dba crypto.games
Fransche Bloemweg 4
Willemstad, Curacao

CryptoPay
CryptoPay
WeWork Bldg, 12 Hammersmith Grove
London, W6 7AP, United Kingdom

CurrencyFair
CurrencyFair Ltd
Colm House, 91 Pembroke Rd
Ballsbridge, Dublin, Ireland

Dafabet
Bayvieew Technologies Ltd dba Dafabet
RCBC Plaza, Makati
Cagayan Valley, Philippines

ecoPayz
PSI-Pay Ltd dba ecoPayz
Afon House, Worthing Rd
Horsham, West Sussex, RH12 1TL, United Kingdom

Electrum [Bitcoin Wallet]
Electrum
63-65 Blvd Massena
Paris, 75013, France

Entropay
Ixaris Systems (Malta) Ltd. dba Entropay
2 Stephen St
London, W1T 1AN, United Kingdom

Expekt Sportsbook
Mangas Gaming Malta Limited dba Expekt Sportsbook
Level 3, Tagliaferro Business Center, High St c/w Gaiety Ln
Sliema, SLM1551, Malta

Fabulous Poker
Investments Manager, S.A. dba Fabulouspoker.com
Sabana Sur
San Jose, 10000, Costa Rica

Fairlay
Fairlay LLC
200 Meters norte de la Cruz Roja de Santa Ana, 8vo Piso
San Jose, San Rafael, Costa Rica

Foxbit
Foxbit
Av. Eng. Luis Carlos Berrini, 550; Cidade Moncoes
Sao Paulo, Brazil

FTX
FTX Trading Ltd.
Lower Factory Road, PO Box 990
St. John’s, Antigua and Barbuda

Gala Poker
LC International Limited dba Gala Poker
Ste 6, Atlantic Suites
Gibraltar, Gibraltar

Gate.io
Gate.io
PO Box 31119, Grand Pavilion, Hibiscus Way; 802 W Bay Rd
Grand Cayman KY1-1205, Cayman Islands

Gatehub
GateHub Limited
Level 3, 207 Regent St
London, W1B 3HH, United Kingdom

gbets
Dynamex (Pty) Ltd dba G-bets
PO Box 7383, Westgate
Roodeport, 1734, South Africa

GGPoker
GG International Limited dba GGPoker
8 Upper Dukes Rd
Douglas, IM2 4BA, Isle of Man

Global Poker
VGW GP Limited dba Global Poker
5-7 Matilda Ct, Giuseppe Cali St
Ta’Xbiex, XBX1423, Malta

Goalwin Poker
Merkur Interactive Italia SpA dba Goalwin Poker
Via dei Lavorsatirn 136/138 20092
Cinisello Balsamo, Italy

GTBets
gtbets.eu dba GTBets
support@gtbets.eu
Willemstad, Curacao

Heritage Sports
Heritage Sports
customerservice@heritagesports.com
San Jose, Costa Rica

HitBTC
Hit Tech Solutions Development Ltd dba HitBTC
Ste 15, Oliaji Trade Centre, Francis Rachel St
Victoria, Mahe, Seychelles

Huobi
Huobi Technology Holdings Ltd
Rm 1404-05, 14F, Nan Fung Tower 88
Hong Kong, Hong Kong

Iconomi
Iconomi Ltd
10 Orange St
London, WC2H 7DQ, United Kingdom

Ignition Casino
Lynton Limited dba Ignition Casino
Craig Plaza, 51-55 Fountain St
Belfast, BT1 5EB, United Kingdom

Intertops
International Gaming & Entertainment Ltd dba Intertops
PO Box W427, Teledome bldg, Old Parham Rd
St. John’s, Antigua & Barbuda

Interwetten
Interwetten Gaming Ltd.
2nd Flr, Global Capital Bldg, Testaferrata St
Ta’Xbiex, XBX1403, Malta

iPoker
Playtech (Cyprus) Limited dba iPoker
Ground Flr, St. George’s Ct, Upper Church St
Douglas, IM1 1EE, Isle of Man

Iron Poker
Universe Entertainment Services Malta Limited dba Iron Poker
Level 3, Valletta Buildings, South St
Valletta, VLT1103, Malta

J88 Poker
J88Ent Ltd dba J88 Poker
Unit 1101, 11th Flr, Tower 1, Enterprise Square, No. 9, Sheung Yuet Rd; Kowloon Bay
Hong Kong, Hong Kong

Jazz Sports
DPT Sports Group dba jazzsports.ag
DPT Building, Pavas
San Jose, Costa Rica

Juicy Stakes Poker
Thinkquick Ltd dba Juicy Stakes Poker
3997 Armory Bldg
Basseterre, St. Kitts (Saint Kitts and Nevis)

Justbet.co
Investments Manager, S.A. dba Justbet.co
Edificio La Colmena
San Jose, Costa Rica

Just Dice
Just-Dice.com
PO Box 0823-03411
Panama City, Panama

KuCoin
KuCoin Co., Limited
20 Science Park Rd
Singapore, Singapore

Ladbrokes
LC International plc
Ste 6, Atlantic Suites
Gibraltar, Gibraltar

Ledn
Ledn (USA) Inc.
700-350 Bay St
Toronto, ON, M5H 2S6, Canada

Libertyslots.lv
Liberty Slots Group dba Libertyslots.lv
support@libertyslots.com
Willemstad, Curacao

Livecoin
Red Velvet Investments Ltd dba Livecoin
help@livecoin.net
Belize City, Belize

LooseLines
DPT Sports Group dba looselines.ag
DPT Building, Pavas
San Jose, Costa Rica

Lowvig
Lowvig.ag
support@lowvig.ag
San Jose, Costa Rica

Luxon Payments
Luxon Payments Ltd
Cobden Chambers, Pelham St
Nottingham, NG1 2ED, United Kingdom

MarathonBet
MarathonBet.com
Abraham de Veerstraat 9
Willemstad, Curacao

Matchbook
Triplebet Limited dba Matchbook
Inchalla, Le Val
Alderney, GY9 3UL, Channel Islands (Guernsey)

Mercatox
104363744 Ltd dba Mercatox
Mailboxes E.T.C., Peel House 30
Altincham, WA14 2PX, United Kingdom

MuchBetter
MIR Limited UK Ltd dba MuchBetter
Finance House, 20/21 Aviation Way
Southend, Essex, SS2 6UN, United Kingdom

MyBookie.ag
Duranbah Limited N.V. dba MyBookie.ag
7 Abraham de Veerstraat
Willemstad, Curacao (Netherlands Antilles)

Natural8.com
Run Good N.V. dba Natural8.com
9 Abraham de Veerstrat
Willemstad, Curacao (Netherlands Antilles)

NetBet
NetBet Enterprises Ltd dba NetBet
209, Marina Street
Pieta, PTA9041, Malta

Neteller
Paysafe Financial Services Ltd. dba Neteller
Compass House, Vision Park, Chivers Way
Cambridge, CB24 9BZ, United Kingdom

Nexo Financial LLC
Nexo Financial LLC
1 Canada Sq, Level 39, Canary Wharf
London, E14 5AB, United Kingdom

Nitrogen Sports
Nitrogen Sports
support@nitrogensports.eu
San Jose, Costa Rica

Nordic Bet
BML Group Ltd dba NordicBet
Betsson Experience Center, Ta’Xbiex Seafront
Ta’Xbiex, XBX1027, Malta

Noxwin
Galaxy Grouop Ltd dba Noxwin.com
Intershare Chambers
Road Town, Tortola, British Virgin Islands

Oanda Europe
Oanda Europe Limited
Flr 3, 18 St. Swithin’s Ln
London, EC4N 8AD, United Kingdom

Oddsmaker Casino
OddsMaker.ag
support@oddsmaker.ag
Curacao, Curacao (Netherlands Antilles)

OKEx
Aux Cayes FinTech Co. Ltd dba OKEx
Unit 10-02, Level 10, Menara Binjai, No. 2, Jalan Binjai
Kuala Lumpur, 50450, Malaysia

OKPoker
Loto Quebec dba OKPoker
500 Sherbrooke St W
Montreal, QC H3A 3G6 Canada

Pacific Poker
Cassava Enterprises (Gibraltar) Limited dba Pacific Poker
Suite 601-701, Europort Ave
Gibraltar, Gibraltar

PaddyPoker
PBB Counterparty Services Limited dbaPaddyPoker
Triq il-Kappillan Mifsud
St. Venera, SVR1851, Malta

Party Poker
Electra Works dba Party Poker
Suite 6, Atlantic Suites, Europort Ave
Gibraltar, Gibraltar

Pinnacle Sports
Ragnarok Corporation N.V. dba Pinnacle.com
Pletterjweg 43
Willemstad, Curacao (Netherlands Antilles)

Planetwin365 Poker
SKS365 Malta, dba Planetwin365 Poker
Corso Vittoria Emanuel 11, 282-284
Rome, 00188, Italy

Players Only
Gaming Ventures Ltd. dba Players Only
60 Nevis St
St. John’s, Antigua (Antigua and Barbuda)

Poker4u
Olincorp Limited dba poker4u
7, Florints St, Greg Tower, 6th Flr
Nicosia, 1065, Cyprus

Poker770
Mandarin Gaming NV dba Poker770
PO Box 4920
Curacao, Netherlands Antilles (Curacao)

Pokerhost
PH Multitech Curacao N.V. dba Pokerhost
E-Commerce Park, Vredenberg
Willemstad, Curacao, (Netherlands Antilles)

PokerKing
King Enterprises BG Ltd. dba PokerKing
Plaza P.L. Brion Unit 4
Willemstad, Curacao

PokerStars
Rational Intellectual Holdings Limited dba PokerStars
Douglas Bay Complex, King Edward Rd
Onchan, IM3 1DZ Isle of Man

PokerStars.eu
Rational Intellectual Holdings Ltd dba PokerStars.eu
Villa Seminia, 8, Sir Temi Zammit Ave
Ta’Xbiex, XBX1011, Malta

PokerStars.fr
REEL Malta Limited dba PokerStars.fr
Villa Seminia, 8, Sir Temi Zammit Ave
Ta’Xbiex, XBX1011, Malta

Poloniex
Polo Digital Assets, Ltd. dba Poloniex
F20, 1st Floor, Eden Plaza
Eden Island, Seychelles

PPPoker
AceKing Tech Limited dba PPPoker
OMC Offices, Babrow Bldg
The Valley, 2640, Anguilla

PredictIt
PredictIt Europe Limited
6 Agar St
London, WC2N 4HN, United Kingdom

PS3838.com
Ragnarok Corporation dba ps3838.com
Pletterjweg 43
Willemstad, Curacao (Netherlands Antilles)

Red Kings
SkillOnNet Ltd. dba Red Kings
Office 1/5297 Level G, Quantum House, 75 Abata Rigord St
Ta’Xbiex, XBX1120, Malta

Red Stag Casino
DeckMedia.NV
Heelsumstraat 51, E-Commerce Park
Willemstad, Curacao

RedStar Poker
RSP Entertainment N.V. dba RedStar Poker
12 Georgiou Grive Digeni, Stephanie House, Office 101
Nicosia, 3101, Cyprus

Run It Once [Poker]
Run It Once Ltd.
35 Strait St
Valletta, VLT1434, Malta

Skrill (formerly Moneybookers)
Skrill Limited
Floor 27, 25 Canada Square
London, E14 5LQ, United Kingdom

Skybook Sportsbook and Casino
Azure Ventures Limited dba Skybook Sportsbook and Casino
G1, Haven Ct, 5 Library Ramp
Gibraltar, Gibraltar

slots.lv
Lynton Limited dba slots.lv
Craig Plaza, 51-55 Fountain St
Belfast, BT1 5EB, United Kingdom

Smarkets
Smarkets (Malta) Limited
The Hedge Business Center, Level 7, Triq Ir-Rampa ta’ San Giljan
St. Julians, STJ1062, Malta

Sorare
Sorare SAS
5, Avenue du General de Gaulle
a Saint Mande, 94160, France

sportbet.com
5Dimes Casino and Sportsbook dba sportbet.com
Edificio Equus
San Jose, Costa Rica

Sports Interaction
Mohawk Online dba Sports Interaction
2006 Old Malone Rd, PO Box 1539
Kahnawake, QC, J0L 1B0, Canada

Sportsbetting.ag
Blue High House S.A. dba Sportsbetting.ag
Area Bancaria, Avenida Balboa
Panama City, Panama

Sportsbook
Paddy Power Betfair dba sportsbook.eu
Belfield Office Park, Beech Hill Rd
Clonskeagh, Dublin, 4, Ireland

swcpoker
OrangeWebsite.com dba swcpoker (aka Seals With Clubs, swcpoker.eu)
Kapparstigur 7
Reykjavik, Iceland

The Greek
WS Processing Ltd. dba The Greek Sportsbook
#1 Mangrove Way, M.B.F.Z.
Freeport, Montego Bay, Jamaica

Tiger Gaming
Troy Logic Limited dba Tiger Gaming
170, Patar House, Level 1 (Ste A203), Psaila St
Birkirkara, BKR9077, Malta

Titan Poker
Universe Entertainment Services Malta Limited dba Titan Poker
Level 3, Valletta Bldgs, South St
Valletta, VLT1103, Malta

TrransferWise
TransferWise
6th Flr, The Tea Bldg, 56 Shoreditch High St
London, E1 6JJ, United Kingdom

True Poker
BMX Entertainment dba True Poker
71C Georgio A, Office 3, Germasogeia
Limassol, 4047, Cyprus

Unibet
Trannel International Ltd. dba Unibet
Level 6, The Centre, Tigne, Point
Sliema, Malta

Vietbet
5Dimes Casino and Sportsbook dba Eurobet
Edificio Equus, San Pedro de Montes de Oca, 7mo Piso
San Jose, Costa Rica

WagerWeb
WagerWeb.ag
support@wagerweb.ag
San Jose, Costa Rica

William Hill
WHG (International) Ltd
6/1 Waterport Place
Gibraltar, Gibraltar

Winamax.fr
Winamax
CS 50746, CEDEX 07
Paris, 75345, France

Winner Poker
Universe Entertainment Service Malta dba Winner Poker
Level 3, Valletta Bldgs, South St
Valletta, VLT 1103, Malta

WPTPoker.com
Electraworks Limited (bwin.party digital entertainment plc) dba WPTPoker
Ste 711, Europort
Gibraltar, Gibraltar

Yobit
Yobit.net
support@yobit.net
Moscow, Russia

Youwager.eu
Dowson Universal Technologies Limited dba Youwager.eu
20 Stuart Ct
Consett, County Durham, DH8 5GA, United Kingdom (hide)

If anyone has additions or corrections to the list feel free to email them to me.

Posted in Cryptocurrencies, FINCEN, Gambling, International | Tagged | Comments Off on Online Gambling and Cryptocurrency Addresses for 2022

IRS: On Third Thought, Let’s Grant “Relief” That Isn’t

Posted on February 17, 2022 by Russ

Yesterday, I wrote a post stating the IRS was giving relief on the new Schedules K-2 and K-3.  I did that because I believed what the IRS wrote.  The IRS stated:

Coming relief from certain Schedule K-2 and K-3 reporting: The IRS intends to provide certain additional transition relief for this year from the Schedule K-2 and K-3 reporting for certain domestic partnerships and S corporations with no foreign activities, foreign partners or shareholders, and without knowledge of partner or shareholder need for information on items of international relevance. For 2021, these qualifying domestic partnerships and S corporations will not have to file the new schedules. We are taking this step in response to feedback we received from the tax community and our stakeholders. The IRS will provide full details of this relief soon.

Silly me, taking the IRS at their word.  The IRS did indeed add an FAQ on Schedules K-2 and K-3 detailing the relief.  That relief is noted in question 15, but if you read questions 10 – 12 that relief vanishes.  The IRS in question 10 states they won’t penalize taxpayers who make a “good faith” effort to comply, but in question 11 notes the same rules that can require domestic-only entities to file Schedules K-2 and K-3:

In many instances, a partnership or S corporation with no foreign partners, foreign source income, no assets generating foreign source income, and no foreign taxes paid or accrued may still need to report information on Schedules K-2 and K-3. For example, if the partner or shareholder claims the foreign tax credit, the partner generally needs certain information from the partnership on Schedule K-3, Parts II and III, to complete Form 1116. This information should have been reported in prior years, including before the Tax Cuts and Jobs Act, on the Schedules K and K-1, and is information the partner or shareholder needs to compute the foreign tax credit limitation, which determines the amount of foreign tax credit available to the partner or shareholder.

So the reality is that nothing has changed from Monday–there is no real relief at this point.  I gave three examples of real relief yesterday: “There are three courses of action the IRS should choose among for the long-term resolution of the issue.  They could just use a de minimis threshold of somewhere between $1 million and $25 million of sales; entities with sales below that and no foreign partners and foreign operations would be exempt.  The IRS could base whether Schedules K-2 and K-3 need to be filed on the prior year’s requirements for filing Form 1116.  Or the IRS could just drop the requirement to file these forms for domestic entities with no foreign partners or operations.”  I would accept any of these (or something similar).

The problem is that I’ve dealt with the IRS in the past on “reasonable cause” issues with an international filing.  A few years ago, clients of mine timely filed (with an extension) Forms 3520 and 3520-A related to a foreign trust.  They mailed these forms using the equivalent of certified mail (neither of these forms can be electronically filed).  A year after filing, they each received a $10,000 penalty notice for late filing.  This made no sense; I had filed the extensions and had proof of that.  We wrote the IRS noting this.  One spouse had the penalties instantly removed.  The other spouse had to go to Appeals over the same exact issue, and it took 30 months before the penalties were finally removed.  (There was never an Appeals hearing–we just received a letter stating the penalties were removed.)  The clients were under stress during those 30 months from a possible $10,000 penalty and were not happy.

I do not want my clients to face draconian penalties.  Battling “reasonable cause” has been an adventure and I don’t think it will get better given that the IRS is drowning in paper.

The IRS also asked why tax professionals didn’t complain when the draft K-2 and K-3 forms and instructions were released last summer.  That’s simple: We did not think we would be impacted.  At that time, the instructions did not include any reference to a US-only entity with no foreign partners or operations needing to file these forms.  The instructions were not changed on this until late January 2022.  How do you expect tax professionals in July 2021 to know the IRS would change the rules in January 2022?

To the IRS: You need to offer real relief.  This is already an awful (likely disastrous) Tax Season.  Your actions on this matter do not inspire confidence.

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IRS: “You Know That New K-2/K-3 Requirement: Well, We Had Second Thoughts.”

Posted on February 16, 2022 by Russ

UPDATE: Make sure you read the post of February 17, 2022 on this issue.

Every so often the IRS actually listens to the tax professional community.  Tax professionals were unanimous in stating that requiring a domestic partnership with no foreign partners and no foreign operations to complete the new Schedules K-2 and K-3 was stupid; it’s similarly stupid for an S-Corp with no foreign operations.  (I wrote about this requirement 11 days ago.)  The IRS added the following notice to a special page on the 2022 Tax Season:

Coming relief from certain Schedule K-2 and K-3 reporting: The IRS intends to provide certain additional transition relief for this year from the Schedule K-2 and K-3 reporting for certain domestic partnerships and S corporations with no foreign activities, foreign partners or shareholders, and without knowledge of partner or shareholder need for information on items of international relevance. For 2021, these qualifying domestic partnerships and S corporations will not have to file the new schedules. We are taking this step in response to feedback we received from the tax community and our stakeholders. The IRS will provide full details of this relief soon.

It;s great that the IRS realized the problems that these new schedules involve for tax professionals and taxpayers during what is sure to be a challenging Tax Season.  However, there’s still a long-term problem that needs to be resolved.

Consider Harry, a partner in a domestic partnership (call it Acme) with no foreign partners and no foreign operations.  He and his wife typically have about $400 of foreign tax paid through a different partnership he’s a partner in.  He tells the managing member of Acme that for 2022 (next year’s taxes filed in 2023) he doesn’t have a Form 1116 filing requirement.  Acme timely files its 2022 return and doesn’t include Schedules K-2 and K-3.  In September, Harry receives the other partnership’s K-1, K-2, and K-3 and discovers that this year there was $610 of foreign tax paid.  Does Acme now have to amend its 2022 returns?  Is Acme subject to draconian penalties even though the partner had no way of knowing about the Form 1116 requirement? 

There are three courses of action the IRS should choose among for the long-term resolution of the issue.  They could just use a de minimis threshold of somewhere between $1 million and $25 million of sales; entities with sales below that and no foreign partners and foreign operations would be exempt.  The IRS could base whether Schedules K-2 and K-3 need to be filed on the prior year’s requirements for filing Form 1116.  Or the IRS could just drop the requirement to file these forms for domestic entities with no foreign partners or operations.

Unfortunately, I suspect all that’s happened is the problem has been postponed one year.

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That 6 Million Return Backlog? Oops, We Mad a Math Error: It’s Really 24 Million

Posted on February 12, 2022 by Russ

Everyone makes math mistakes.  When we last heard from IRS Commissioner Chuck Rettig, the backlog of unprocessed returns was down to about 6 million.  Per the Washington Post, that was slightly off–well, a bit more than slightly.  The true backlog is 23.8 Million,  a difference of about 18 million returns.  True, this does include unopened correspondence–but that correspondence also likely includes returns.

Of course, you can try calling the IRS up.  I generally do multiple times during a week.  I have about twelve items I need to get resolved and (in theory) I can over the phone, (a) if I get through, (b) I speak to an IRS employee who can resolve the issue, and (c) don’t get hung up on.  Here’s an example: A client paid his tax in October, the IRS cashed the check, but the payment isn’t posted on his account.  He just received a CP504 notice, gave me a Power of Attorney, and sent me a copy of the front and back of the check (and it absolutely cleared).

The first issue is calling the IRS.  I’m in the Pacific time zone, so when I call at 7am (the earliest time I can call), I’m competing against everyone else in the US.  On Monday I couldn’t get through to the Practitioner Priority Service (PPS).  I made ten attempts, and then stopped as I had a full day of appointments.  On Tuesday, I reached the IRS–and was not even on hold!  That’s akin to a one-outer in poker.  The helpful IRS employee (and do note that every IRS employee I’ve dealt with on PPS has been very helpful) could not help me; she did not have access to the computer system that allowed transferring of payments.  She transferred me…and I was on hold with a hold time given of “between 30 and 60 minutes.”  90 minutes later, the IRS system hung up on me (I think it may be programmed to do that when you’re on a call and it lasts two hours).  I couldn’t try to call again on Tuesday, because I had appointments.

On Wednesday, my fourth try to PPS resulted in a callback from the IRS 30 minutes later.  This employee found my client’s payment, and then started the work to move the payment–which apparently was a lot more complex than either he or I thought it would be.  Every five to seven minutes he’d get back on the line stating he was still working on this form to move the payment.  After 100 minutes, the system hung up on me.  On his last “I need another five to seven minutes” he said he was close to having this resolved.  But I don’t know for sure.

On Thursday I had an outside appointment, and by the time I got into the office I didn’t have an open two hours to call the IRS.  (I can work while I’m on the phone with the IRS, but I can’t have a scheduled call or appointment.)  On Friday, I didn’t get through to the IRS.  On Monday, my first scheduled call is at 11am, so I am hopeful I can confirm that this payment has been resolved, and then go on to issue number two (a 2016 return that still hasn’t been processed).

Last week, 30 Senate Republicans wrote a letter to Treasury Secretary Janet Yellen and Commissioner Rettig that the situation is untenable.  They’re correct.  So what can we do–given that it’s likely impossible to salvage the 2022 Tax Filing Season from being on the level of disastrous?  I have some ideas:

  1. Drop the Schedule K-2 and K-3 requirements for all but the largest partnership and S-Corporations (say, $25 million in gross income or more) for 2021 returns.  This will (a) eliminate even more paperwork for the IRS to process (currently, K-2s and K-3s must be attached as pdf’s to returns; this requires the IRS to do special processing), (b) help the tax professional community, and (c) help most taxpayers where these documents add just filing requirements with no tangible benefits to anyone.
  2. Get all IRS employees who are supposed to work in IRS Service Centers back in the Service Centers.  Yes, Covid still exists but it’s going to be with us (likely) forever.  This can be done by Presidential executive order–and Treasury Secretary Yellen and IRS Commissioner Rettig should be demanding this.  This will eliminate the issue with “error” returns (see below).  Additionally, it will increase IRS efficiency: employees will be in the locations they should be in.
  3. Start posting realistic time-frames for processing of paper returns.  I’m quoting 12 months for a paper-filed tax return and 18 months for a paper-filed amended return.  For electronically filed tax returns, I’m quoting two to four weeks if you’re in the lucky 90% that don’t get an error/reject and nine months if you’re in the unlucky 10% that does get an error/reject.  For electronically filed amended returns, I’m quoting one year for processing.  (All time-frames are averages.)  If my suggestion about getting employees back in the Service Centers is acted on, that will reduce the backlog of returns as error/reject returns won’t take the months that they currently take to be resolved (pre-Covid, they took three to four days).
  4. Listen to TIGTA (the Treasury Inspector General for Tax Administration) and spend what technology money you have wisely.  Yesterday, TIGTA released a report noting that the IRS cost the US $56 million in interest payments because of outdated mail processing equipment that would cost between $360,000 to $650,000 to replace.
  5. Work with Congressional leadership to get the budget increased for improved technology, not snooping on bank records.  Secretary Yellen and Commissioner Rettig can point out that improved technology would allow for far greater efficiency within the IRS.  Do you know that the main IRS computer system dates from 1959 and uses COBOL, and the last major improvements date from the 1980s?  Given the current situation, there should be bipartisan support for this.  Yes, this wouldn’t have benefits for a few years but we have to start somewhere.
  6. Work with Congressional leadership to increase starting wages for IRS employees.  The IRS is trying to hire more individuals (including in customer service), but has only hired 10% of the number they want to hire (and are budgeted to hire).

By the way, do you know how many IRS employees there are per phone call coming in to the IRS?  For every 16,000 calls, there’s one employee.  (Yes, employees take more than one call a day, but if you wonder why you and I can’t get through, that’s the answer.)

What does this mean for the 2022 Tax Season?  If your tax professional doesn’t have gray hair, he or she will by October 15th.  If you need to call the IRS, budget a day to get through (you will likely need it).  If you have to write the IRS (or submit a paper return) and need a quick response, consider a prayer: It can’t hurt and it just might help.  And hug your tax professional; he or she will appreciate it.

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On NFTs, DeFi, DAOs, and Staking: Cryptocurrency Taxation (2022) (Part 1)

Posted on February 6, 2022 by Russ

With NFTs (non-fungible tokens), DeFi (decentralized finance), DAOs (decentralized autonomous organizations), and staking the rage in cryptocurrency, there are a lot of questions on what this means for taxes.  Then on Friday I see headlines like, “IRS Will Not Tax Unsold Staked Crypto As Income.”  So before I move toward NFTs et. al., let’s start with this report and staking.  And even that has issues as there are many different kinds of staking.

Here, the staking involved is for Tezos.  The taxpayers  received about $9,400 of Tezos and they had to decide how it should be taxed.  The problem is that while the IRS has ruled cryptocurrency is property, and how airdrops and similar things are taxed, the IRS has not given definitive guidance on staking.  Should you use the principle that since you received $9,400 of value, you have $9,400 of income?  (In that scenario, when you sell it you will have a capital gain or loss with $9,400 of basis.)  Or should it be no income today but income tomorrow when you sell the Tezos?  (Here, you would have ordinary income of whatever you sell the Tezos for.)

The major issue in determining what to do is that it has typically taken the IRS three years to issue rulings on cryptocurrency matters.  When there is no law, regulation, or guidance, taxpayers are required to use general tax law principles. Given how the IRS has ruled on airdrops, it’s more likely than not the IRS will rule that the Tezos the taxpayer received were income when received.

Indeed, that’s what the taxpayers did on their originally filed tax return for the 2019 tax year.  The taxpayers then filed an amended return asking for a refund (based on that $9,400 not being income).  That they didn’t receive a response isn’t a surprise: It’s taking the IRS twelve months to process an electronically filed amended return; it’s taking 18 months for paper-filed amended returns.  Under the law, if you file a “Claim for Refund” (which is done by filing an amended return asking for a refund) and the IRS doesn’t respond within six months, you can file a court action in federal District Court or the federal Court of Claims.  The taxpayers filed a court case demanding the refund in District Court.

Last week, the federal government offered to give the refund.  This led to those headlines stating unsold staked crypto is not income.  Unfortunately, those headlines are anything but true today.  (It is possible they may be true tomorrow, though.)  The action by the Department of Justice could be for any number of reasons:

  • The IRS doesn’t like the fact pattern of this case, and would prefer to fight a different case;
  • The IRS wants to delay this issue until they have more time to study it; or
  • The Department of Justice looked at the cost of fighting this case and the dollar amount of the refund, and decided it made economic sense to let the taxpayers have the refund.

Had the taxpayers accepted the refund (they did not), this would not have led to a precedential ruling that unsold staked crypto is not income.  It would have been solely related to those taxpayers and that fact pattern (the Tezos they received).  Had the taxpayers received some other crytpo via staking in 2020, they would have had to fight the IRS again.  It definitely would not have been applicable to any other taxpayers.

As I noted, the taxpayers did not accept the US government offer, so the case moves forward.  As of today, there is no trial date scheduled.  It is possible that the judge will rule in favor of the US government or the taxpayers.  Given that there is no trial date, it’s possible there will not be a ruling in this case until 2023.  If the government wins, I would expect the taxpayers to appeal (to the Sixth Circuit Court of Appeals because the taxpayers reside in Tennessee); they have stated they would like to have a precedent set.  If the taxpayers win, the US could just pay the refund amount or appeal.  If they pay, that would lead to a nonprecedential case.  It would be binding on the taxpayers and the IRS as to the fact pattern in the case, but it would not be binding on you or I.  If the US appeals, it might or might not lead to a precedential decision; not all appellate ruling are considered precedential.  Even if there is a precedential ruling, it would only be binding in Kentucky, Michigan, Ohio, and Tennessee (though other courts would likely look at the decision).

What does this mean for today?  First, the headlines that unsold staked crypto isn’t income are not true.  Everyone is still required to use basic tax principles in determining whether this kind of staking leads to immediate income (or not).  In a later part of this series I’ll look a little more in depth at staking and explain why a taxpayer win in this case might not be a win (and could be a loss for taxpayers).  We also have to consider how the doctrine of constructive receipt fits into staking.  Second, the most conservative course of action is to include staking as income (when received).  I believe it is more likely than not that’s how the court will rule.  (The taxpayers do have some tax law on their side, though; this is definitely not a slam dunk case.)  Third, until the court actually rules nothing has changed.  The IRS offer to pay the refund could have nothing to do with the case itself.  The best analysis of this case that I’ve seen is from the National Law Review; I would strongly advise anyone involved with cryptocurrency staking to peruse the linked article for a far better analysis of the matter than almost anything else I’ve seen.  Finally, anyone involved in such staking should discuss this with their tax professional.  There are some options as it relates to the 2018 tax year that fall off a cliff in April that taxpayers may want to consider.  Additionally, there are options in how this activity is treated on your tax return that you and your tax professional should discuss.

(The court case is Jarrett v. United States, No. 3:21-cv-00419 (M.D. Tenn.).)

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The K-2/K-3 Kerfuffle

Posted on February 5, 2022 by Russ

The IRS announced a year ago that there would be two new forms for partnerships and S-Corporations with international income and/or partners: Schedules K-2 and K-3 (links are to the partnership versions of these forms).  Most tax professionals would have a return or two that had to deal with these new schedules; no one believed it would be a big deal.  Indeed, the original IRS instructions for these forms confirmed that.

And then the IRS changed the instructions.  Most of these changes are technical and of little concern to the public.  However, the IRS made a major change related to the interaction of these schedules and Form 1116 and Form 1118 (Foreign Tax Credit).  The change–which I’ll detail below–means that almost every partnership (and many S-Corporations) will need to complete at least a portion of these new schedules.

The IRS added an example in the new instructions of when a partnership does not need to complete Schedules K-2 and K-3:

Example. U.S. citizen A and U.S. citizen B own equal interests in domestic partnership. In Year 1, domestic partnership has no foreign source income and no assets that generate foreign source income. Domestic partnership does not pay or accrue foreign taxes. In Year 1, U.S. citizen A pays $100 of foreign income taxes on passive category income which was reported to U.S. citizen A on a qualified payee statement. U.S. citizen A does not pay or accrue any other foreign taxes and has no other foreign source income. U.S. citizen B does not pay or accrue foreign income taxes. In Year 1, because U.S. citizen B paid no foreign taxes for which it can claim a foreign tax credit and U.S. citizen A qualifies for the exemption from completing Form 1116 to claim a foreign tax credit and such information was provided to domestic partnership by both U.S. citizen A and U.S. citizen B, domestic partnership need not complete Schedules K-2 and K-3, Part I, box 1, box 2, box 3, box 4, box 5, and box 10, Parts II or III.

In English, this means that if a tax professional is certain that no partner is taking a foreign tax credit where Form 1116 or Form 1118 is completed, then Schedules K-2 and K-3 do not need to be completed.  The problem is that in almost all cases, tax professionals will not know this and will have no way of knowing this!

Form 1116 is exempt on a personal return if you have $300 or less in foreign taxes paid ($600 if married filing jointly).  Consider Acme Partners–with Bill, Jane, and Ralph as partners.  It has no foreign activities at all, so you would think it would be exempt from Schedules K-2 and K-3.  Bill and Jane have no foreign income of any sort.  Ralph, though, invests in lots of partnerships that issue him K-1s.  Some years he’s had $1,000 of foreign tax paid; other years, it’s $10.  Ralph isn’t on good terms with Bill and Jane, but Ralph is still a partner.  Russ is the tax professional, and he deals with Bill in getting the return prepared.  Russ can ask Bill, “Will any of the partners file Form 1116?”  We have a number of issues:

  1. Whether Form 1116 is required might not be known until each partner receives all of his or her K-1s (and that can be in mid-September).  There’s an obvious circular issue here: Whether a partner needs to file Form 1116 depends on all the K-1s (and K-2/K-3s), but you’re preparing a K-1 (and K-2/K-3).
  2. What if a partner refuses to discuss this with the “Tax Matters Partner?”  Conflict of interest rules under Circular 230 (the regulations governing tax professionals) likely prohibit the tax professional from asking the recalcitrant partner.
  3. What if one or more partners honestly doesn’t know?
  4. Why should a partnership with only US activities complete Schedules K-2 and K-3 given that (a) there is no international activity; (b) there are no foreign partners; and (c) the IRS can accurately determine the income and expenses of the partnership (and accurately determine each partner’s share of income) from the return and the Schedule K-1.  Additionally, any partner who is filing Form 1116 can accurately complete it using Schedule K-1 for a US-only partnership.
  5. Completing Schedules K-2 and K-3 will add time and cost to any partnership return.
  6. As of today, the IRS estimates it will be ready to accept efiled Schedules K-2 and K-3 for partnerships on March 17th (partnership returns are due on March 15th).  It’s even worse for S-Corporations: the IRS is estimating it will be ready for those Schedules K-2 and K-3 in the May to June time-frame (S-Corporation returns are due on March 15th, too).
  7. The IRS is allowing “transition relief” for 2021 returns, but a “good faith” effort is supposed to be made to prepare the new schedules.

There are only three solutions that I can see.  The first–and best–is that the IRS simply state that a partnerships and S-Corporations with no foreign activity or partners need not file Schedules K-2 and K-3.  The reality is that the IRS does not need such partnerships (and S-Corporations) to complete the forms in order to determine whether a partner’s (or S-Corporation shareholder’s) Form 1116 (or Form 1118) was completed accurately.  The second possible solution is for the IRS to allow a statement to be attached to the return stating that the partnership has no foreign income (similar to the de minimis property regulation statement).  The third solution is just to postpone Schedules K-2 and K-3 until the 2022 tax year so that a workable solution can be found.

If the IRS continues down their current path, I do not see a way around preparing Schedules K-2 and K-3 for almost every partnership.  For perhaps 10% of the partnership returns we prepare, we also prepare all partners’ tax returns (most of those are husband-wife partnerships); for those, we can determine if we must prepare Schedules K-2 and K-3.  For the other 90%, I will have no choice but to prepare these schedules.  This will add at least 20 minutes of work for each return (possibly more), and that will add to every client’s bill.  Additionally, all of these partnerships will have to go on extension.  And by the time March 17th comes and I can efile the returns, we’ll be buried in personal returns.

The issue is less of one for S-Corporations.  Perhaps half of the S-Corporation returns we prepare are one-owner returns.  For those, we know whether they need to include Schedules K-2 and K-3.  Still, we will have many impacted returns; all of those returns will need to be extended (and the owners’ personal returns will all have to be extended).

This was already shaping up to be a miserable Tax Season. This change is only going to make miserable year turn nightmarish.  If anyone from the IRS reads this, please reconsider what you’ve done or postpone it a year.

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“Amount Due by January 3, 2022….”

Posted on February 4, 2022 by Russ

We receive lots of IRS notices for clients.  In yesterday’s mail, we received two CP14 notices.  These state that a taxpayer filed a return with a balance due.  Many times this is an issue of the return being processed before the payment; sometimes, of course, the taxpayer truly owes the tax.

In this case, there’s a deeper issue.  Both notices were dated December 13, 2021 with payments due on January 3, 2022—more than a month ago.  This is clearly an IRS issue (not a Post Office issue, as we received two such notices sent from two different IRS Service Centers).  There was no insert giving the taxpayer more time to pay.  It appears the IRS again has a backlog of notices to be mailed, and is sending out notices late.

One of the two taxpayers received a CP503 notice in January (noting the balance due, but with no explanation of the amount); for the other taxpayer, this is the first communication from the IRS that has been received.  The taxpayer who received the CP503 notice has paid his tax (and the account has a $0 balance), but assume for the moment you received such a notice.  Wouldn’t you call the IRS up and ask them did you get my payment?

The IRS sending notices late will only add to the phone volume, making it even harder to reach the IRS for callers who truly have issues.  I’m not sure why these notices were sent seven weeks after the date on the notices, but this is just adding to a miserable Tax Season.

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Hug Your Tax Professional: The IRS Is At It Again

Posted on January 20, 2022 by Russ

I was hoping that the 2022 Tax Season (which begins for individuals on Monday) would be more pleasant than the last two.  Yes, the IRS didn’t cause Covid; however, as the National Taxpayer Advocate noted in her recent report the IRS’s response has been (to put it charitably) ‘lacking.’  It doesn’t look like things are improving based on three items in the mail.

The first is the most serious.  The IRS is sending out letters (Letter 6419) noting how much taxpayers received in the Advance Child Tax Credit (ACTC).  Yesterday, a client received hers.  The letter noted that she had received $1,000.  She went through her records and found that was wrong (she received a little over $800).  The letter gives a phone number to call if there’s a discrepancy–which she did.  The helpful IRS agent told her that the letter is wrong, and that the information my client had (which she got from her bank records) was accurate.  “The IRS is aware of the issue.”

Are corrected letters going to be sent?  Is this a widespread issue or is it just (say) less than 1% of all letters?  What will happen when I file the client’s return noting the correct amount of ACTC?  Will the IRS use the letter’s $1,000 or the correct amount in verifying the return?  Will a whole bunch of returns have very slow processing because of this?  (Undoubtedly, yes.)

I just saw on Twitter other tax professionals seeing the same issue, so it’s clear there’s a problem.  Hopefully, it’s just a few individuals…but I have my doubts.

The second issue relates to an IRS notice that come on Tuesday, January 18th.  The notice is dated December 6, 2021 and asks for payment by December 27, 2021.  Given how bad the mail has been it’s possible this is a Post Office issue rather than IRS, but I strongly suspect the IRS is again sending out notices well after their dates.  There was no insert telling me that the client has longer to pay.  Again, is this a one-off or the start of a trend?

The third issue involves a correspondence examination.  A client was selected for a correspondence exam.  We needed additional time to get the paperwork together; the IRS gave us an additional month (to January 5th).  We sent our response to the IRS on January 3rd.  In yesterday’s mail, the IRS has now assessed the tax with an audit report dated December 27, 2021.  Yes, the IRS ignored the extension it gave.  Yes, I will have to call the IRS to see what’s going on and why the IRS’s left and right hands have no idea what they’re doing.  Yes, this adds to the call volume at the IRS–and it shouldn’t have happened.

This is not a good start to the 2022 Tax Season.

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Frozen Returns: If You Made an Extension Payment on May 17th And Haven’t Received Your Refund….

Posted on January 11, 2022 by Russ

Yesterday, a client of mine called asking about her 2020 tax refund.  I assumed she was one of the unlucky individuals whose return fell out of IRS processing and is stuck waiting to be reviewed.  However, she told me that her return didn’t even show in the IRS’s “Where’s My Refund.”   I confirmed that–and that didn’t make any sense; her return was filed on September 30th and accepted that day.

I called the IRS and discovered another reason some haven’t received their refunds.  If you made an extension payment on exactly May 17, 2021 (the last day to file a 2020 extension) and are receiving a refund, your return may have been “frozen” by the IRS computer system.  (I had my second such case today.)  I don’t know how extensive this issue is, but the representative I spoke to yesterday told me that he had dealt with “many” such cases.

Hopefully, someone at the IRS is going through frozen returns to manually unfreeze the returns without taxpayers having to call the IRS.  But if you made an extension payment on May 17, 2021 and have filed your return and have not received your refund, check IRS’s “Where’s My Refund.”  If no status at all is shown (the return does not show as still being processed), you or your representative needs to call the IRS and have the return “unfrozen.”

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Tax Season (For Individuals) to Begin on January 24th

Posted on January 10, 2022 by Russ

The IRS announced today that Tax Season will begin on Monday, January 24th.  That’s the first date that electronically filed returns (and extensions) for the 2021 tax year will be accepted for individuals.  (Businesses can already file their 2021 returns.)

Do note that almost every tax professional uses software, and that some forms may not be ready until after that date.  Additionally, some state forms and state returns will not be able to be processed until after January 24th.

You should not file your return until you have all your tax paperwork.  The deadline for brokerage firms to send their 1099s is February 15th (and it is routinely extended).  If you are a partner in a partnership, a shareholder in an S-Corporation, or a beneficiary of a trust, you must wait until you receive your K-1’s.  Remember, it’s better to extend than amend.

Finally, we do not expect the deadline for individual returns to be extended from April 18th.  That means you will need to file (or file an extension) by then.

As for how this year’s Tax Season will go, expect a repeat of last year.  The IRS still has not processed all 2020 returns (but they’re through April!).  Until IRS staff is fully back at their Service Centers, there’s no reason to expect anything to change.  This is not a scenario to make any IRS stakeholder–be it a tax professional, taxpayer, or Congressman–happy.  I can state for the record that I absolutely expect the same issues with delayed processing of refunds this year.  (I have a client whose 2019 return is still stuck in limbo!)

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