In United States v. Hom, [enhanced version available to lexis.com subscribers], 2014 U.S. Dist. LEXIS 77489 (N.D. CA 2014), here, Hom was an online gambler who held accounts at two online poker companies, PokerStars and PartyPoker. He used a financial organization, FirePay.com, to facilitate his gambling with the poker companies by transferring money to and from the poker companies.
On September 20, 2011, the IRS assessed defendant with civil penalties under 31 U.S.C. 5321(a)(5), [enhanced version available to lexis.com subscribers], for his non-willful failure to submit FBARs, as required by 31 U.S.C. 5314, [enhanced version available to lexis.com subscribers], regarding his interest in his FirePay, PokerStars, and PartyPoker accounts. The IRS assessed a $30,000 penalty for 2006, which included a $10,000 penalty for each of the three accounts, and a $10,000 penalty for 2007 based solely on defendant's PokerStars account (Hendon Decl., Exh. 5, at 5). Interest and penalties continue to accrue until paid in full pursuant to 31 U.S.C. 3717, [enhanced version available to lexis.com subscribers].
The two issues were: (1) whether the accounts with the three entities were "bank, securities or other financial account[s]" that must be reported on an FBAR; and (2) whether each of the three accounts was in a foreign country The Court answered both questions yes.
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