What Is Going To Happen To High-Stakes Fantasy Football?

DoubleG · Post by **DoubleG** » Mon Jul 04, 2011 1:50 pm

Originally posted by Old School:

In my dealings with the IRS over past 25 years as a CPA, this is the interpretation the IRS has taken;
"Paid" does not necessarily mean having cash in your hand. If you win and decide to roll it over and keep it in your account, you have effectively been "paid". The fact that you did not receive a check, cash it ,and send it back does not matter.

The IRS then expects the providers to issue a 1099 regardless. I dont know if many follow that rule though. If you receive a 1099MISC, you may deduct all related entry fees, expenses on your return.

The IRS pays attention to "constructively" earned income. This has been their position in my dealings. you may encounter IRS who differ, and you may hear differently from other tax professionals.

I dont imagine 1099's are a reason why rolling over funds is offered at all. In fact, when the WCFF mentioned this as an option, it became the first warning sign to me joe - this all makes perfect sense. solid post.

Erok · Post by **Erok** » Mon Jul 04, 2011 3:55 pm

Well its clearly obvious that WCOFF saw what FFPC did with their prize money.

Haveing F'ed up like they did they are now pulling a last ditch attempt to stay afloat in my opinion by using the "escrow" tag.

Pretty weak IMO.

I still cant believe people have not been paid. Has anyone from other companies been prosecuted (AFFL, F JUNGLE, FFOC)? If no one is going to jail, then what is to stop thieves from stealing all the prize money?

Tom Kessenich · Post by **Tom Kessenich** » Tue Jul 05, 2011 2:27 am

Originally posted by 4D:

Add in the fact that corporations can change things on a dime. A change in management, change in philosophy, all can lead to instability. Take the NFFC and the number of times it has changed hands in the last 3 years.One very important thing to keep in mind 4D is that despite the fact the NFFC/NFBC/NFBBC has changed hands a few times the past couple of years there has never been any instability in terms of paying out the prizes. All of our prize winners have been paid in full regardless of whether the parent company was Krause/F&W Media or Liberty Media and the same will hold true now that we're with STATS.

So while Greg and I have had to order a few new business cards lately our players have all been paid and there hasn't been any instability or questions in terms of whether people would be paid. It would be inaccurate for anyone to try and present the change in ownership we've had as having a negative impact on our events in that regard since that clearly has not been the case. We're very proud of that and we know everyone at STATS is well aware of the importance of this aspect of our division.

[ July 05, 2011, 08:28 AM: Message edited by: Tom Kessenich ]

mkrucek · Post by **mkrucek** » Tue Jul 12, 2011 3:19 am

For those still owed by AFFL I found it interesting that they are being promoted on the following site - Scum attracts scum
If you have time you might ask the host, Mike North, why he is promoting a business that has screwed its customers. Just click on the "contact us" button.

[ July 12, 2011, 09:22 AM: Message edited by: 4D ]

joetreff · Post by **joetreff** » Tue Jul 12, 2011 6:51 am

In my dealings with the IRS over past 25 years as a CPA, this is the interpretation the IRS has taken;
"Paid" does not necessarily mean having cash in your hand. If you win and decide to roll it over and keep it in your account, you have effectively been "paid". The fact that you did not receive a check, cash it ,and send it back does not matter.

The IRS then expects the providers to issue a 1099 regardless. I dont know if many follow that rule though. If you receive a 1099MISC, you may deduct all related entry fees, expenses on your return.

The IRS pays attention to "constructively" earned income. This has been their position in my dealings. you may encounter IRS who differ, and you may hear differently from other tax professionals.

I dont imagine 1099's are a reason why rolling over funds is offered at all. In fact, when the WCFF mentioned this as an option, it became the first warning sign to me

This came up recently with the shutdown of online poker sites. Believe it or not taxable earnings are accrued at the time of winning them, not receiving them. Technically everyone who earned money on Full Tilt Poker in 2011 owes taxes on that money even though they will not receive it for a while. The good thing for them is that Full Tilt doesn't report winnings to the IRS so they can skirt the law and declare it only once they receive it.

I think they used the term "in-kind". Maybe Old School can clarify...Guys that haven't been paid by WCOFF are still liable for the taxes until WCOFF says they aren't getting paid.

In real life I use common sense too much to follow such rules...but don't be surprised if you are owed money by WCOFF and your CPA says to pay the taxes on it...

DoubleG · Post by **DoubleG** » Tue Jul 12, 2011 7:51 am

Originally posted by felixflamingo:
This came up recently with the shutdown of online poker sites. Believe it or not taxable earnings are accrued at the time of winning them, not receiving them. Technically everyone who earned money on Full Tilt Poker in 2011 owes taxes on that money even though they will not receive it for a while. The good thing for them is that Full Tilt doesn't report winnings to the IRS so they can skirt the law and declare it only once they receive it.yes, i believe it. a concern for me (and others) are companies that act as enablers and allow the "skirting of laws".

i've posed a few questions to the IRS related to this topic. I'll report the news (good or bad) when/if I receive it.

DoubleG · Post by **DoubleG** » Tue Jul 12, 2011 8:45 am

Originally posted by The FF Maestro:
[QUOTE]Originally posted by 4D:
[qb] its only a matter of time before there is government oversight and thats the type of intervntion that can ruin many an industry, including ours here.

some would say this industry has already been ruined for some people. ask affl customers, fantasy jungle customers, wcoff, etc...