United States

Court holds online gaming account not subject to FBAR reporting

Online poker account not reportable for FBAR purposes


In an unpublished decision, U.S. v. Hom, the United States Court of Appeals for the Ninth Circuit held that an account with an online gambling company was not reportable on the Foreign Bank and Financial Accounts Report (FBAR) forms used to report a taxpayer’s interest in an account with a foreign financial institution. The court held that even though the taxpayer could carry a balance on these online accounts, and in fact was required to maintain a balance in order to gamble, the accounts did not fall within the definition of a ‘bank, securities or other financial account.’ In addition, the funds in the accounts were used solely for gambling and the online gaming companies only facilitated gambling and served no other financial purposes. As a result, the court concluded that the gaming houses were not functioning as banks and the taxpayer’s accounts were not accounts with financial institutions.  

While the decision is unpublished and is of little precedential value, taxpayers may nonetheless wish to consider the logic of this decision in assessing their filing requirements since it provides a novel argument in support of treating online gambling accounts as not subject to reporting. It may also support treating other types of online accounts as not subject to reporting where the foreign entity with whom the taxpayer has the account performs no other financial services. However, if any financial services are provided by the foreign entity, including money transfer services, the account may qualify as a reportable account.


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