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Tax Impact of Bitcoin Transactions and Gambling

Bitcoin became mainstream in 2014. It was the first year that major retailers started accepting the online currency and it was the first time many taxpayers learned exactly what it was (if you have questions about Bitcoin, be sure to read this). IRS announces bitcoins to be treated as property Some taxpayers needed to quickly change their 2013 returns last year when the IRS made a late tax season change, announcing…

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WSOP 2015

The 2015 World Series of Poker kicked off yesterday with the Employee’s Event and continued with a $5,000 no limit event. The Kondler & Associates booth is up and running in our usual location just outside the Pavilion Room. We will be there for the entirety of the series, so if you have any questions regarding tax issues, feel free to stop by on break or before you play.

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Preparer Fraud Tied to Affordable Care Act

If you did not have health insurance during 2014, you may be subject to a penalty when you file your return. The penalty, known as the shared responsibility payment, is part of the Affordable Care Act that went into effect in 2014. The IRS has recently announced that preparers are informing their clients that they must remit their shared responsibility payment to the preparer in order for the payment to…

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Are Online Lotteries Gaining Steam?

In recent years, states have taken their lotteries online to boost ticket sales and increase profits. Georgia launched their online lottery program back in 2012, but last week, they rolled out a new addition to their program. The state partnered with Gtech, an Italian gaming company, and expanded the game library offered online. Along with lottery tickets, the site now offers keno, instant games (click and win) and draw-based games.…

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IRS Employment Woes Deepen

It is no secret that the IRS will be completely understaffed for the upcoming tax season. I have talked about it before and am reminded whenever I call the tax preparer hotline and wait on hold for over two hours. After the budget was cut and hiring was lessened, it would seem that things could not get much worse for the IRS. Oh how we were wrong! A new report has…

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Repairs Regulation Update

Great news for small-business owners, and accountants as well. The previously discussed repairs regulation, which would have cost small businesses time and money this tax season, has been simplified. Today, the IRS announced relief under the regulation, which allows companies with assets of $10 million or less (or annual gross receipts of $10 million or less for the prior three tax years) to utilize a safe harbor method to ensure…

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You Can’t Do That!

It’s always fun when “You Can’t Do That” rolls around because it means that it is Friday and that I get to take a look at what people think they can get away with. This week starts off with a CPA, James Lee, from New York. Mr. Lee was tasked with handling the business returns of several restaurants in the area. That shouldn’t be too difficult, right? Report sales, expenses…

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Premium Tax Credit Overpayment Relief

Earlier, I gave a brief overview of the Premium Tax Credit and how it could affect your 2014 return. In the overview, I mentioned that there are two ways to receive the credit: 1) as a “lump sum” at the end of the year when you file your return or 2) as equal monthly installment payments paid directly to your insurance provider (if you remember correctly, I advised against this…

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Your 2014 Tax Return – Part IV: Last Year’s Return

The first three segments of these posts (Part I, Part II and Part III) covered the documentation necessary to file your 2014 return. This segment will focus on how you can use your return from 2013 to help you file this year. If you are returning to a tax preparer you used in the previous year, they will already have your return on file, so there is not much to worry about. However, if you are using a new preparer, it is always best practice to bring a copy of your latest year’s return for their review.

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Hockey in the Desert? Count Me In!

I have been a lifelong hockey fan. My son played hockey growing up, so I was always coaching or watching from the stands. We were both die-hard New Jersey Devils fans and would always go to as many games as we could during the season. I was even fortunate enough to see them lift the cup in 2003 against the Ducks. So, when I heard Las Vegas may be getting…

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TurboTax Provides Reminder: Always Be Alert for Fraud

This has been going around in the news the last few days, but I wanted to write a quick follow-up in case this affects you or someone you know. Last week, TurboTax temporarily halted its state e-file services as a result of an increased level of “suspicious” filings. After investigation, TurboTax deemed that its software and databases had not been the source of the potential fraudulent activity and resumed e-filing…

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You Can’t Do That!

In last week’s “You Can’t Do That”, I referenced a preparer who practiced only minutes away from my hometown in New Jersey. This week, we kick things off with two individuals who carried out a scheme only a few miles away from my office in Las Vegas. Wayne Reeves and Diana Vaoga ran an illegal tax scheme that involved setting up false trusts to reduce tax liability. The two would tell…

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What’s in a Name?

I recently had a client ask me a few questions regarding her recent marriage. She had gotten married during the second half of 2014 and her new, married name was on the official marriage certificate. However, she did not have the time to change her name elsewhere (Social Security Office, bank accounts, credit cards, etc.). She was worried that her tardiness regarding her name change would affect her return. The…

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Unemployed During 2014? You May Owe Taxes

Being unemployed puts every taxpayer in a stressful position. Between trying to make ends meet and searching for a new job, the last thing many people are thinking about is their tax situation. However, if you received unemployment compensation during the year, you will receive Form 1099-G and any income shown must be reported as taxable income on your return. Some are unaware that these benefits are taxable and fail…

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Baseball, Taxes and the $200 Million Dollar Man

Max Scherzer recently signed an unprecedented contract with the Washington Nationals in which he will be paid $210 million over 14 years. Multiple teams were vying for one of the league’s top pitchers, but the Nationals were the ones who were eventually able to woo him. There were probably multiple reasons (roughly 210 million if I had to guess) that Scherzer signed with the team, but one of the biggest factors…

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Your 2014 Tax Return – Part III: Proof of Insurance

In Parts I and II, I went through the documentation you will be receiving from your employer, lender, brokerage firm or government that shows your income and deductions throughout the year. Today, I will touch upon what you need to prove you were covered by health insurance throughout the year. When you are filing your 2014 tax return, you will need proof of insurance for each month that you were…

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You Can’t Do That!

This week’s “You Can’t Do That” kicks off in my home state of New Jersey (this fraudster actually lives in the town adjacent to my current hometown). Sharif Mahfouz, of Brick, New Jersey, operated a tax preparation company that primarily provided tax return help to expatriots. Mr. Mahfouz had his clients sign-off on their returns, then, added bogus credits and deductions to increase refunds without notifying the client. He had…

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Avoidable Tax Mistakes

It is early enough in the year to start planning your tax return and determining the potential financial ramifications. Whether you will owe money to Uncle Sam at the end of the year, or be due a refund, here are some helpful tips that could better prepare you for the coming months. Always File Your Return On-Time The biggest mistake I see each year is failing to file a tax…

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Proposed Regulation Could Change Poker in Nevada (Update)

Good news for poker players in Nevada! Today, AG Burnett, the Chairman of the Nevada Gaming Control Board, commented on SB 40 that was mentioned earlier this week. He said that the bill is strictly aimed at curbing third-party betting regarding to sports and racebook activity, not poker. This is a sigh of relief for the poker community and a smart move by the NGCB to quell any rumors before things…

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New Jersey: Death and (Gas) Taxes

I was born and raised in New Jersey and it is where I opened my first practice. I still have an office in New Jersey, so any time a local story turns up that could affect my New Jersey clients, I try to give my thoughts on the matter. New Jersey, from a tax perspective, has been known for two things: high estate and inheritance tax rates, and low gas tax rates.…

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Your 2014 Tax Return – Part II: Deductions and Related Forms

Part I of the series discussed the most popular forms received at the end of the year that report income to the IRS. Part II focuses on other forms you may be receiving shortly that will help you offset some of your income: Form 1098 This form will be sent to you by your bank or lender if you have a qualified home mortgage. The amount shown in Box 1 can…

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Proposed Regulation Could Change Poker in Nevada

If you walk through the halls of the Rio during the World Series of Poker, or through any poker room for that matter, you will quickly discern that many players are involved in a staking arrangement of some kind. Whether backed or swapping action, players have realized that it is less risky to parcel out “pieces” of their action to fellow players or backers. This reduces their risk and allows…

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You Can’t Do That!

In this week’s “You Can’t Do That” I will take a look at a New Orleans woman and her prison scheme, a greedy Philadelphia preparer and an ex-IRS employee who all decided it would be a good idea to try and steal from Uncle Sam.

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MLB Player Settles Bill with IRS (Update)

A few weeks ago I mentioned former MLB player Darryl Strawberry’s ongoing issue with the IRS. In short, he owed the IRS, so the IRS announced it would auction off the rights to his deferred compensation. The auction began at $550,000 and concluded yesterday. The highest bid? $1.3 million. This equates to the full value of the annuity ($1.28 million). The IRS will collect nearly double the starting offer, which will more than cover…

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Department of Revenue May Have a “Ruff” Time in Court

The Indiana Department of Revenue is being sued for compensatory damages regarding a 2009 tax case. The case, Garwood v. Indiana, revolves around a $125,000 tax liability, including interest, owed by the taxpayer. The taxpayer was in the business of breeding and selling dogs and did not properly remit sales tax during the period in question. Since the taxpayer could not make the payment, the Department of Revenue seized her assets, which…

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What You Need to Know About the Premium Tax Credit

What is the Premium Tax Credit? The Premium Assistance Credit or Premium Tax Credit is a refundable credit that helps taxpayers pay for health insurance purchased through a government-sponsored exchange. In essence, this credit subsidizes the cost of health insurance throughout the year by allowing for a refundable credit at the end of the year. Taxpayers can also elect to have their total credit paid directly to their insurer in…

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Your 2014 Tax Return – Part I: Sources of Income

Another tax season has snuck up on us already. Tax organizers have already been sent to clients to prepare them for the challenging tax season ahead. Once they receive this subtle reminder that tax season is looming, clients who are trying to stay ahead will email or call me and ask what they can be doing now to prepare for the coming months. The tax organizer covers every possible tax preparation…

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New IRS Treatment of Canadian Retirement Plans

The IRS has made it easier for U.S. taxpayers to benefit from favorable tax treatment on their Canadian retirement plans in 2014. Any U.S. taxpayer with a registered retirement savings plan (RRSP) or registered retirement income fund (RRIF) is now eligible for tax deferral, similar to the treatment of IRAs and 401(k)s. To qualify, all you need to do is file a U.S. tax return for any year in which…

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Employer-Provided Transit Benefit for Employees

In 2014, taxpayers were allowed $130 per month in employer-provided transit and vanpooling benefits under Code Sec. 132(f)(2)(A). The Tax Increase Prevention Act of 2014 retroactively changed the monthly exclusion from $130 to $250. The new rate applies to the entirety of 2014 and will force employers to act quickly to make adjustments to 2014 tax forms. The IRS has issued a special administrative procedure for the fourth quarter of…

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Another Important Change for Business Owners This Tax Season

The Affordable Care Act has grabbed most of the headlines for the upcoming tax season, but there are other requirements that will add to the difficulty of the 2014 filing season. One such requirement that will have an impact on almost all business owners, especially those in the real estate field, is the Repair Regulation that was issued by the IRS a few years ago. The Repair Regulation changes the…

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You Can’t Do That!

Yesterday, I mentioned the ongoing issues the IRS is having regulating tax preparers. Today, two more preparers have been brought into the spotlight because of their actions. There is also a bonus story about six college students who thought they could out-smart the IRS. Jeffrey Shelby, Jr. plead guilty to filing hundred of fraudulent tax returns from 2009 to 2012. The end result of his actions cost the IRS over…

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Benefits of Having a CPA (Part 2)

Las Vegas Accountants for Business Read the 1st part of the benefits of having a CPA here Owning a business can be stressful. There are numerous tasks to juggle: orders to fulfill, employees to manage and a seemingly unending mountain of paperwork. It’s difficult to do it all yourself and as a small business owner, may not be the most efficient use of your time. A CPA can help to…

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More Tax Preparer Regulations on the Horizon?

In recent years, the IRS has been trying to cut down on the amount of fraudulent tax returns. Notably, in 2012, the IRS attempted to require all paid federal tax return preparers to complete registration, competency testing and continuing education. Last spring, it was ruled, and upheld in appeals, that the IRS lacked statutory authority to impose these regulations. After the IRS was limited in its plan to regulate paid…

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Benefits of Having a CPA (Part 1)

Why Having Accountants in Las Vegas on Your Side Is Important Why is having accountants in Las Vegas on your side so important? Accounting services include tax planning and research, financial accounting, trust and estate compliance and investment and financial services. A CPA offers peace of mind on important compliance requirements and frees up time to focus on other business and personal activities. Some of the benefits of having a…

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Final Estimated Tax Payment Due January 15

This is a friendly reminder that the final estimated tax payment for 2014 is due by January 15.* If you owe estimated taxes, make sure to submit them to the IRS (or your state) in order to prevent an underpayment penalty. Individuals must pay estimated taxes if all three are true: You expect to owe more than $1,000 of tax when you file your return Your federal tax withholding is less than…

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Cheap Gas and the Push for Higher Taxes

U.S. gas prices have plummeted in recent weeks, dropping them to the lowest levels we have in seen in the last few years. According to the AAA Fuel Report, the national average for a gallon of gas is $2.19, which is significantly lower than the average of $3.32 one year ago. If you are interested to see where your state falls, CNN Money has a helpful interactive map that shows the…

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CPAs in Las Vegas

Things to Prepare Prior to Meeting with Your CPA Bringing all paperwork to a meeting with your CPA is imperative so your taxes and other financial documents can be filled out properly. However, it can be difficult to know everything you need to have with you. Consider the following items as you prepare for a meeting with one of our CPAs in Las Vegas: Income-Related Documents Any Form W2s Any…

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Additional Tax Law Changes for 2015

I have touched upon the main tax issues that will changing in 2015, but below are a few additional issues that you should be aware of when beginning to plan for 2015: Limited to One IRA Rollover per Year: Any taxpayer who receives an IRA distribution on or after January 1, 2015, will not be able to roll over any portion of the distribution into an IRA if they rolled…

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Professional Gamblers Tax Guide for 2015

The start of the new year brings many resolutions, some that will be kept and others that will be broken. Whether it is a resolution, or not, everyone should make an effort to begin documenting their tax year starting today. Many of my clients have heard me say this year after year, and most of them have listened and are no longer unprepared when it comes time to file their…

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Finalized Hospital Regulations Protect Patients

More than half of the hospitals in the U.S. are tax-exempt charitable organizations. Last week, the Department of the Treasury finalized a provision that holds charitable hospitals to a higher standard and protects many of the patients treated at these facilities. Although many of these provisions have been in effect for the past four years, hospitals were only required to make a “good faith” effort to comply with the law…

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Employer Tax Mandate: A Helpful Guide

Individuals aren’t the only ones who need to deal with changing health care regulations in the new year. Beginning this year, the employer mandate will go into effect, requiring certain employers to offer health insurance to employees. Although tax preparers have been aware of this mandate for quite some time, not all business owners have a complete understanding of the mandate and, honestly, I don’t blame them. I have spent…

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Affordable Care Act in 2015

Happy new tax year! Now that celebrations are over, its time to start planning for the year ahead. Taxpayers who do not have insurance, or are unsure if they will meet the Minimum Essential Coverage (MEC) requirements of the Affordable Care Act, should start by addressing this issue. In the 2014 tax year, the shared responsibility penalty for not having MEC was the greater of: $95 per adult ($47.50 if…

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State Tax Rates to Change in 2015

The following state tax rate changes will be in effect beginning January 1, 2015: Arizona: Corporate income tax rate drops from 6.5% to 6.0% Illinois: Income tax rate drops from 5% to 3.75% and corporate income tax rate drops from 9.5% to 7.75% Indiana: Income tax rate drops from 3.4% to 3.3% and corporate income tax rate drops from 7% to 6.5% (effective July 2015) Massachusetts: Income tax rate drops…

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New Retirement Distribution Rules for 2015

The IRS has modified the rule regarding retirement plan rollovers to multiple qualified destinations. The previous rule (which is in effect until December 31, 2014) considered each destination from a retirement plan distribution to be a separate distribution. This meant that if you had both pre-tax and post-tax contributions in your retirement plan, you were not able to simply move the pre-tax contributions to a traditional IRA and the post-tax contributions…

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Tax Season to Begin January 20

Its official! The IRS has announced that tax season will begin on-time and, despite the tax extenders delay, tax preparers will be able to electronically file returns beginning January 20. I must say, I am impressed that the IRS, which is not known for its agility, does not need to push back the start of tax season. I was anticipating a delay of a few days, or even a week, but…

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Supreme Court Ruling to Impact Affordable Care Act

The Supreme Court will hear King vs. Burwell in the early months of 2015 and its decision could have a substantial impact on the new healthcare mandate. The case will determine which individuals are eligible to receive the Premium Tax Credit. This credit is currently available to individuals that purchase their health care through a state or federal exchange and that meet certain income and filing requirements. However, case challenges the current…

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WSOP: 149 Days and Counting

The 2015 World Series of Poker begins on May 27, 2015. We will be in our usual location inside the Rio throughout the entire 49-day event. The WSOP continues to do an excellent job with the event and we look forward it every year. From what has been released so far, it looks like 2015 will be no different, and it will feature a new $565 tournament with a $5 million…

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Tax Extenders Pass House, Tax Season to Start as Planned

Last week, the House passed the “tax extenders” bill that renewed 55 tax advantages for taxpayers. The extenders include such benefits as the educator deduction, qualified tuition and related expenses, mortgage insurance premiums, and numerous other business-related deductions (the full list can be seen here). All of these items were extended through the end of 2014. Meaning, we will be revisiting this vote again in 2015. Although we had been waiting…

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New Jersey Preparer Sentenced to Jail

Todd Halpern, a 49-year-old tax preparer from Guttenberg, New Jersey, bought an established tax practice in 2008. He maintained the client base and prepared over 650 returns over the next several years. One problem, he filed each of those returns using the Electronic Filing Identification Number (EFIN) of the prior owner. He used the existing EFIN because he was not eligible to obtain his own due to his prior criminal record.…

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New IRS Publication Aimed at Explaining the Affordable Care Act

The IRS recently released Publication 5187 in order to provide taxpayers with an additional resource regarding the new health care laws for 2014. The 21-page document effectively presents the different nuances that will be required for the coming tax years. If you are looking for an overview or refresher regarding the Affordable Car Act, I would recommend this quick read which covers the basics of the new requirements. However, if you…

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A Few Thoughts on the Earned Income and Additional Child Tax Credit

One of the issues Congress is trying to address for the upcoming tax season is the amount of tax fraud related to two of the more popular tax credits: the Earned Income Credit (EIC) and Additional Child Tax Credit (ACTC). In order for a preparer to file a return with EIC, they must complete a due diligence checklist with the taxpayer. However, if the return is self-prepared, this checklist is…

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MLB Player Settles Bill with IRS

Former baseball outfielder Darryl Strawberry failed to pay over $540,000 in taxes from 1987-1990 and over $80,000 from 2003-2004. Strawberry acknowledged that he owes the IRS, but refused to liquidate property in order to settle the debt. The IRS took the case into their own hands and decided to auction off the right to Strawberry’s deferred compensation from the New York Mets. If you have at least $550,000 (the minimum…

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Another Scam Making Its Rounds

A few months ago I warned all of my clients about the increased number of phishing scams aimed at defrauding taxpayers. Recently, there has been a new string of fraudulent activities occurring, but this time, scammers are preying on companies. Employees, typically controllers or treasurers, have been receiving emails requesting them to authorize a wire transfer. The emails are made to look as if they are coming from executives from…

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IRS Budget Cuts Add to Challenging Tax Season

President Obama signed the spending law that allocated $10.9 billion to the IRS for the fiscal year ending September 30, 2015. This may seem like a staggering figure, but it is actually 3% less than what the IRS received in 2014 and 12% lower than the requested budget. The IRS has already said the agency is only hiring one employee for every five employees that leave. This new budget cut…

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WARNING: Do Not Be Fooled by Scam IRS Phone Calls

The IRS issued a consumer alert providing taxpayers with tips to protect themselves from telephone scam artists pretending to be the IRS. These scams have always existed, but the amount of scam attempts over the course of the year has risen dramatically. The callers demand money or trick callers into believing they have an additional refund due in order to gain access to private information. This information is then used…

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Should Online Poker Accounts be Treated as Foreign Bank Accounts?

Case Overview: A district court in California recently heard the case of United States v. Hom, 2014. Mr. Hom, an online gambler, held accounts at two online poker sites, PokerStars and PartyPoker, during 2006 and 2007. In order to fund his online play, Hom used an online financial site, FirePay.com, to manage transfers of money to and from his poker accounts. The court needed to rule whether these accounts were…

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Full Tilt Poker Remission Tax Implications

Thousands of U.S. poker players have funds that are currently frozen in Full Tilt Poker accounts. Although these funds have been inaccessible for nearly three years, the Department of Justice announced that payments to players who filed petitions for remittance, before the deadline on November 16th, are expected to be made no later than March 31, 2014. This means those players who appropriately filed and met the deadline will be…

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CPA Peer Review

In the field of accounting, peer review is the review of the work of one CPA or CPA firm by another CPA or CPA firm. The review process includes looking at working papers and accounting procedures the CPA firm follows. It constitutes a form of self-regulation by qualified members of a profession within the relevant field. Peer review methods are employed to maintain standards of quality, improve performance, and provide…

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Poker Tax Liability

For all poker players but a fortunate few, July 16th marks a bittersweet day in the poker community. After 61 bracelet events (and one still to be decided), the World Series of Poker came to an end when only the November Nine remained in the Main Event. It also brought an end to our time at the WSOP as we were operating a vendor booth in the halls of the…

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Fiscal Cliff Tax Changes

We have all heard of the “Fiscal Cliff” and how it will affect us all. With the passage of the America Taxpayer Relief Act of 2012 the fiscal Cliff has been averted but what does this entail? We have compiled the information in this article to help you understand the many changes that may affect you and your family. Individual Tax Facts Tax Rates – The tax rates for years…

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