Who Reports Their Winnings As Income?

[gaming_mouse]

This is actually a question for those who are keeping their winnings from online poker under the table. What do you think the safest, and cheapest, methods of doing this are?

Here are the possibilities I've come up with. Please let me know your thoughts (unless they are of the pious/moralistic variety, in which case don't bother):

1. When cashing out, have a check mailed to you. Cash the check using a check-cashing service, pay the 3-7% fee, and feel good that you are not paying the 20-40% fee charged by the government. This method seems very safe to me, although it is somewhat of a hassle and there will always be a 3-4 week delay between your cashout and your receipt of the money.

2. Cashout using NETELLER, and then withdraw the money using a Neteller ATM card. This is easy and convenient, but probably not too safe. That is, I have no idea if the IRS could get access to your Neteller records or not. Anyone know?

3. FPS-epassport Virtual Visa. Again, easy and convenient. However, I would guess this is also the least safe of all methods, as it is associated with Visa and thus likely linked to your credit report.

Other methods I'm forgetting??

TIA,
gm

[Kellon]

Will somebody please convince me that I am way too concerned about the possible ramifications of these types of posts? But I have to tell you that, in this political climate, I think we do ourselves a real disservice to be discussing these matters in a public forum.

For instance, consider the number and tenor of the recent articles and other reports in the media, and their consistent undercurrent about the harm of online gambling. Consider also the group of folks now occupying various Executive and Legislative branch offices and their consistent public statements about online gambling. And consider further the increasing reports of law enforcement action against poker games.

Keeping all of these things, among other similar things, in mind, and recognizing that the 2+2 forums are widely known and respected, isn't it possible, or likely, that someone in the media is watching the forum and picking up on these threads. And isn't it possible that at some point these threads about how we're avoiding reporting our winnings, or polls on the same, etc. might make it into the national media? And if it does, and if it's done in a big way, isn't it possible that it could be a nail in the coffin?

But then, maybe I'm over-reacting or overly cautious, or whatever. Then again, maybe not. But why take the chance.

[Tuco]

Transfer money to a Canadian like myself, and I'll send you 90% of it in cash via Fedex.

/images/graemlins/smile.gif

Tuco.

[gaming_mouse]

[ QUOTE ]
that someone in the media is watching the forum and picking up on these threads. And isn't it possible that at some point these threads about how we're avoiding reporting our winnings, or polls on the same, etc. might make it into the national media?

[/ QUOTE ]

Seriously, not to be rude, but step back for a second and think about this. It is utterly absurd. You are not taking the "better safe than sorry" line -- you are taking the "completely paranoid about something that has no chance of happening" line.

I mean, "Ooooo, some people on 2+2 were discussing the possibility of not reporting their poker incomes. Stop the press!" Nobody cares.

By the way, don't forget that discussing these things is not a crime.

gm

[Kellon]

I admit to being overly cautious and probably a bit paranoid, but I come by it through professional experience. The possibility that the subject could get interjected into the reports is not at all absurd, especially if someone wants to make the case against online gambling and wants to scrape for every reason why.

The fact is that I have thought about it. My post was merely to suggest that everyone else think about it for a second, too, before running off at the keyboard. You don't think it's an issue; go for it.

(As to whether discussing the ways and means of committing a crime can be a crime in itself, well, that's a whole nother subject.)

[jimymat]

Its about 220 pounds and kinda smelly. Figured if were going to discuss how to rip off our beloved government than this my be the place to post this question. Thanks.

[gaming_mouse]

[ QUOTE ]
the reports is not at all absurd, especially if someone wants to make the case against online gambling and wants to scrape for every reason why.

[/ QUOTE ]

The chance that this post or any conversation inspired by it has any effect on any law or any anti-gambling movement EVER is somewhere between 0 and negative infinity. /images/graemlins/smile.gif

I'm sorry. There are just no two ways about it.

[moondogg]

[ QUOTE ]
[ QUOTE ]
that someone in the media is watching the forum and picking up on these threads. And isn't it possible that at some point these threads about how we're avoiding reporting our winnings, or polls on the same, etc. might make it into the national media?

[/ QUOTE ]

Seriously, not to be rude, but step back for a second and think about this. It is utterly absurd. You are not taking the "better safe than sorry" line -- you are taking the "completely paranoid about something that has no chance of happening" line.

I mean, "Ooooo, some people on 2+2 were discussing the possibility of not reporting their poker incomes. Stop the press!" Nobody cares.

By the way, don't forget that discussing these things is not a crime.

gm

[/ QUOTE ]

- Poker is huge
- Tax and gambling is an inherently sticky issue
- The IRS decides that witl the vast sums of money being wagered online, they should take a closer look at it
- In looking for professional poker players interacting with each other on the topic, the go to RGP. After 5 minutes, they leave RGP
- They then go to the next renowed site, 2+2
- The see 3 threads on the front page of the Zoo, and hundreds of older threads on the taxes

2+2 does represent a significant portion the online poker community, with a high concetration of the people actually making money from it. If the IRS were interested in looking closer at how poker players are reporting income or planning to report income (and the IRS would be stupid to ignore it), this is one of the first places they would/should look.

I think Kellon's point is that there has been a lot of talk on this board about the best way to cheat on your taxes. And yes, people do read it. Poker players encouraging each other to commit jailable federal crimes by evading taxes in such a public forum (along with the recent poker boom) is a good way to lead to a crackdown on gamblers tax returns.

IMHO.

[gaming_mouse]

I would be very appreciative if someone NOT related to Chicken Little would answer the thread....

And I'm really not trying to be snide, but you are just plain wrong to worry about this.

gm

[daryn]

you're gonna get caught.

pay your taxes.

[ricochet420]

I do believe conspiracy to commit tax fraud is a crime in the US
[ QUOTE ]
discussing[/i] these things is not a crime.

gm

[/ QUOTE ]

[gaming_mouse]

[ QUOTE ]
you're gonna get caught.

pay your taxes.

[/ QUOTE ]

Save it for your Bible meeting.

[moondogg]

[ QUOTE ]
I would be very appreciative if someone NOT related to Chicken Little would answer the thread....

And I'm really not trying to be snide, but you are just plain wrong to worry about this.

gm

[/ QUOTE ]

If you feel like actually providing some reasoning behind this, go right ahead.

Regardless, you started a thread in a public forum openly requesting advice and techniques for violating serious federal law. That doesn't strike you as stupid?

[gaming_mouse]

[ QUOTE ]
I do believe conspiracy to commit tax fraud is a crime in the US

[/ QUOTE ]

You've been watching too much Matlock.

There is NO WAY ANYONE gets in trouble for having this conversation.

gm

[daryn]

</font><blockquote><font class="small">In risposta di:</font><hr />
</font><blockquote><font class="small">In risposta di:</font><hr />
you're gonna get caught.

pay your taxes.

[/ QUOTE ]

Save it for your Bible meeting.

[/ QUOTE ]

you are stupid.

[gaming_mouse]

[ QUOTE ]

Regardless, you started a thread in a public forum openly requesting advice and techniques for violating serious federal law. That doesn't strike you as stupid?

[/ QUOTE ]

No, it doesn't. Maybe I'm writing a research paper, you don't know. THIS IS NOT A CRIME. It is totally paranoid and self-involved to think that it is. In this country, you are allowed to talk about things. It's not a crime until you break the law. And this discussion does not count as conspiracy to do anything.

Honestly, I can't believe this is even a point for contention? Do you REALLY believe my post has broken some law?

[ricochet420]

I just said it IS a crime, not that you'd get caught, however, it is pretty stupid. Maybe you should try and find a drug dealer online as well, I'm sure you'd find someone willing./images/graemlins/confused.gif [ QUOTE ]
[ QUOTE ]
I do believe conspiracy to commit tax fraud is a crime in the US

[/ QUOTE ]

You've been watching too much Matlock.

There is NO WAY ANYONE gets in trouble for having this conversation.

gm

[/ QUOTE ]

[gaming_mouse]

[ QUOTE ]
Maybe you should try and find a drug dealer online as well, I'm sure you'd find someone willing.

[/ QUOTE ]

You really believe they are comparable? C'mon.

BTW, no one will get caught because it is NOT a crime.

[mcozzy1]

[ QUOTE ]
1. When cashing out, have a check mailed to you. Cash the check using a check-cashing service, pay the 3-7% fee, and feel good that you are not paying the 20-40% fee charged by the government. This method seems very safe to me, although it is somewhat of a hassle and there will always be a 3-4 week delay between your cashout and your receipt of the money.

[/ QUOTE ]

The IRS can't include your online accounts in an audit?

[david050173]

Well it might not be against the law to say things, but it sure can get you in trouble.

If you want to find ways to hide income from the irs there ar tons of sites out there on how to do it. If you are making small amounts of money, your chances of getting caught are pretty low. If you are making large amounts of money and get audited, you chance of getting caught are high (and it will not matter if you use a debit card or check). And if you thought blockbuster late fees were bad, you should see the IRSs.

Personally I recommend you use the swiss bank account. It sounds so much cooler than saying I a have a neteller debit card. Make sure to register it under a totally fictious name and always go through at least 3 anonymousizers before accessing it.

And just remember Carnivore is watching you /images/graemlins/grin.gif

[gaming_mouse]

[ QUOTE ]

The IRS can't include your online accounts in an audit?

[/ QUOTE ]

Do you think PartyPoker (a non-US company) cooperates with IRS? Call them up and ask. They will you assure you that they will not give your records to anyone, including the IRS. Of course you can choose not to believe them, but I don't see any reason not to. They have everything to lose and nothing to gain by cooperating with our government.

gm

[gaming_mouse]

[ QUOTE ]
It sounds so much cooler than saying I a have a neteller debit card.

[/ QUOTE ]

Excellent point. Rich man's problems, though. I'm not making enough to justify that yet. In fact, I just have my winnings sent into my bank account, because I'm just not worried about it. So my question actually WAS kind of theoretical.

gm

[AngryCola]

[ QUOTE ]
you're gonna get caught.

pay your taxes.

[/ QUOTE ]

It really depends on how much you are bringing in, but I'm with the others who say to just be up front about it if it's an amount over a couple thousand.

Daryn,

You would get caught for obvious reasons. /images/graemlins/wink.gif

gm,

The other users are probably correct when they point out the dangers of discussing this in such an open manner. It's not the smartest thing to be doing. While it's true that you probably won't "get caught" , unless you are bringing in some real money, why risk it? /images/graemlins/smirk.gif

Pay da tax man, or he will f*ck you up.

Sincerely,
A Stupid Monty Python Fan (see avatar)

[mmcd]

[ QUOTE ]
I do believe conspiracy to commit tax fraud is a crime in the US
[ QUOTE ]
discussing[/i] these things is not a crime.

gm

[/ QUOTE ]

[/ QUOTE ]

A conspiracy charge requires an overt act in furtherance of the criminal activity . Mere discussion is not criminal.

It is stupid to discuss this stuff in a public forum though because if you are ever caught, posts like this can be used to show knowledge/intent and make it a lot easier for the government to get a criminal conviction.

With the epassporte thing, I signed up for it a long time ago, and have never really used it, but from what I remember, I never even had to give them my real name. There was no verification, and I got the impression that I could get an epassporte visa under "Joe Smith" or "XG53H838" or whatever the hell name I wanted. Maybe this is different now?

[MicroBob]

If you are filing as a schedule-C as a 'professional' gambler I think you could do almost as well to just take advantage of the deductions that are available to you.

Mileage (and other expenses) to B&amp;M casinos, new laptop, new monitor, ISP monthly bill, home-office equipment, etc.

you'll still be getting shafted a bit....but at least you'll be legitimate and you will cut down the total amount that you owe.

This is really the only option for me anyway as I don't have any other occupation so it's not like i can hide all my income.
For those who have a 'regular' job I suspect the check-cashing place or neteller ATM card is a viable option....albeit still with a decent amount of risk involved.

Get the book Gamber's Guide to Taxes by Walter Lewis for more info on deductions and filing as a 'professional' gambler.
I highly recommend it.


Somebody (I think astroglide) mentioned that if the IRS were to audit you and saw any EFT's from neteller they could ask to see your neteller acct page and would then also see the checks that were sent to you...(or something like that).
I don't know whether this is true or not. But his basic contention was that if the IRS asked to see your neteller records YOU would have to show them (or else you would be breaking the law).

I don't know whether neteller would cooperate with the IRS or not. But he said that it doesn't matter if neteller would...because you HAVE to.


Tax evasion is serious stuff.
They really don't care a whole lot about your internet-gambling....but if you don't pay taxes it gets kind of risky.

[mmcd]

It would probably be best to take it out on a boat and dump it in the ocean. You should definately try to go like 20-30 miles out though. Weight it down with chains and cinder blocks.

[LondonBroil]

I withdrawal around $500 every 2 weeks. I doubt this will raise any red flags IF I decide to not report my income. On the slim chance that I do get audited, will they come to me with my bank statements and say "So, we see these transfers from Neteller....." Do they even have access to this information? I mean, it's not like I'm driving around in a Bentley while I work at my $40K/year job.

[ricochet420]

We just just fill a hole, there are lots of holes in the desert, when in doubt, bury them up to the neck, then put some honey on the head, a bucket over top, and the ants will pick it clean.
[ QUOTE ]
Its about 220 pounds and kinda smelly. Figured if were going to discuss how to rip off our beloved government than this my be the place to post this question. Thanks.

[/ QUOTE ] /images/graemlins/grin.gif

[slickpoppa]

Gaming Mouse, I don't condone such behavior, but what about getting a bank account in the Cayman Islands?

[gusly]

[ QUOTE ]

Somebody (I think astroglide) mentioned that if the IRS were to audit you and saw any EFT's from neteller they could ask to see your neteller acct page and would then also see the checks that were sent to you...(or something like that).


[/ QUOTE ]

This wouldn't be a problem if you had the poker site send you the check directly. You would bypass Neteller completely. I think this is what the previous poster meant by receiving checks in the mail and using check-cashing services.

[david050173]

[ QUOTE ]
I withdrawal around $500 every 2 weeks. I doubt this will raise any red flags IF I decide to not report my income. On the slim chance that I do get audited, will they come to me with my bank statements and say "So, we see these transfers from Neteller....." Do they even have access to this information? I mean, it's not like I'm driving around in a Bentley while I work at my $40K/year job.

[/ QUOTE ]

I am definitely not an expert but it seems to be pretty trivial for some one at the IRS to decide neteller is used mainly for gambling so it might be a good idea to track that money. Set a filter to determine if you net in is greater than 25% of your salary and I have some returns I want to give extra love to. I am guessing for banks this is pretty technically easy. Can the IRS get this info without a court order? No idea. Given that the neteller debit card goes through the standard ATM networks, I am guessing tracking that wouldn't be hard(technically) either. It seems like money laundering is something that OC spent a lot time thinking about and I bet the feds have devised tons of ways to track it down.

[david050173]

[ QUOTE ]
[ QUOTE ]

The IRS can't include your online accounts in an audit?

[/ QUOTE ]

Do you think PartyPoker (a non-US company) cooperates with IRS? Call them up and ask. They will you assure you that they will not give your records to anyone, including the IRS. Of course you can choose not to believe them, but I don't see any reason not to. They have everything to lose and nothing to gain by cooperating with our government.

gm

[/ QUOTE ]

This is wrong as it would be trivial for the US to prevent(technically make it really hard for the average user) access to party servers so party has a lot to gain by not offending the US. If you get investigated your in trouble. But the odds of that are low for most people

[2ndGoat]

You're always gonna have problems lifting a body in one piece. Apparently the best thing to do is cut up a corpse into six pieces and pile it all together. And when you got your six pieces, you gotta get rid of them, because it's no good leaving it in the deep freeze for your mum to discover, now is it? Then I hear the best thing to do is feed them to pigs. You got to starve the pigs for a few days, then the sight of a chopped-up body will look like curry to a pisshead. You gotta shave the heads of your victims, and pull the teeth out for the sake of the piggies' digestion. You could do this afterwards, of course, but you don't want to go sievin' through pig [censored], now do you? They will go through bone like butter. You need at least sixteen pigs to finish the job in one sitting, so be wary of any man who keeps a pig farm. They will go through a body that weighs 200 pounds in about eight minutes. That means that a single pig can consume two pounds of uncooked flesh every minute. Hence the expression, "as greedy as a pig."

2ndGoat

[2ndGoat]

About the ATM business...
I read something just within the last 2 weeks about the IRS was specifically cracking down on people withdrawing cash from offshore accounts using debit cards for tax evasion purposes. I believe the actual announcement was much older than two weeks. The original purpose of the statement was to allow evaders to become compliant with no criminal charges, "only" late fees, if they would name names of whoever set up the account for them.

May have only extended to visa/mastercard, my memory of the subject is sort of hazy. I'd provide the link but i'm a little bit too lazy to the google search.

2ndGoat

[Kirg]

[ QUOTE ]
You're always gonna have problems lifting a body in one piece. Apparently the best thing to do is cut up a corpse into six pieces and pile it all together. And when you got your six pieces, you gotta get rid of them, because it's no good leaving it in the deep freeze for your mum to discover, now is it? Then I hear the best thing to do is feed them to pigs. You got to starve the pigs for a few days, then the sight of a chopped-up body will look like curry to a pisshead. You gotta shave the heads of your victims, and pull the teeth out for the sake of the piggies' digestion. You could do this afterwards, of course, but you don't want to go sievin' through pig [censored], now do you? They will go through bone like butter. You need at least sixteen pigs to finish the job in one sitting, so be wary of any man who keeps a pig farm. They will go through a body that weighs 200 pounds in about eight minutes. That means that a single pig can consume two pounds of uncooked flesh every minute. Hence the expression, "as greedy as a pig."

2ndGoat

[/ QUOTE ]

Ok, how many times have you seen Snatch?

As for taxes, long live "gambling-winnings are tax-free" Canada

[SinCityGuy]

Nice.

Between people like you and terrorists like Mohammed Atta, it's only a matter of time before the feds ban the electronic transfer of funds to U.S. citizens from Neteller.

[SinCityGuy]

[ QUOTE ]
They have everything to lose and nothing to gain by cooperating with our government.

[/ QUOTE ]

Oh, really?

In case you didn't know, Party Poker spends over $2 million per year on their Washington D.C. lobbyists. They want to maintain a very good relationship with the U.S. government, since over 75% of their customer base is located in the U.S.

[mcozzy1]

I played HE with a guy a casino one time who asked a lawyer about reducing the amount of taxes he had to pay on his winnings. The lawyer told him to withdraw a bunch of money from an ATM every time he went to the casino and keep a receipt for it. With cash payouts, there is no way the IRS could prove that you DIDN'T lose the money gambling.

[david050173]

[ QUOTE ]
I played HE with a guy a casino one time who asked a lawyer about reducing the amount of taxes he had to pay on his winnings. The lawyer told him to withdraw a bunch of money from an ATM every time he went to the casino and keep a receipt for it. With cash payouts, there is no way the IRS could prove that you DIDN'T lose the money gambling.

[/ QUOTE ]

That seems a bit sketchy/urban legendish. Lawyers get disbarred for recommeding illegal actions to thier clients. Not to mention in tax court, the burden of proof for a lot things are with the taxpayer not the irs.

[AngryCola]

[ QUOTE ]
Between people like you and terrorists like Mohammed Atta

[/ QUOTE ]

I understand what you are getting at, but it is a gross exaggeration. He is nothing like Mohammed Atta, and it makes me physically ill that you would make ANY kind of connection between the two individuals. The nature of your insult was veiled, but it's there.

Names and insults of that nature shouldn't be hurled about like they mean nothing. /images/graemlins/mad.gif

[SinCityGuy]

[ QUOTE ]
I understand what you are getting at, but it is a gross exaggeration. He is nothing like Mohammed Atta, and it makes me physically ill that you would make ANY kind of connection between the two individuals. The nature of your insult was veiled, but it's there.

[/ QUOTE ]

I didn't connect them. They are separate, but each type of person poses a problem for the government. One is a terrorist laundering money, and the other is a person trying to avoid paying their taxes using a similar tactic.

Either way, a proliferation of these types of activities will almost certainly result in a higher probability that the feds will move to ban electronic transfers to gaming sites and to Neteller.

[AngryCola]

[ QUOTE ]
I didn't connect them.

[/ QUOTE ]

I knew you would say this.

That's why I already stated,
"Your insult is veiled, but it's there."

That is all. Thank you.

EDIT- Poorly veiled

[gaming_mouse]

[ QUOTE ]
He is nothing like Mohammed Atta, and it makes me physically ill that you would make ANY kind of connection between the two individuals. The nature of your insult was veiled, but it's there.


[/ QUOTE ]

Angry,

Thanks for sticking up for a fellow Monty Python lover /images/graemlins/smile.gif. In all honesty, though, his statement was so absurd as to not warrant comment.

gm

[gaming_mouse]

[ QUOTE ]
This is wrong as it would be trivial for the US to prevent(technically make it really hard for the average user) access to party servers so party has a lot to gain by not offending the US.

[/ QUOTE ]

David,

Could you explain? From what I know about the way the internet works, I don't think it would be trivial at all. But I'm not an expert by any means.

gm

[Carl_William]

Just a comment to the Mouse about two guys who told me that the IRS nabbed them real good.

About 8 or 9 years ago, a very visible Lobal tournament &amp; ring game (B&amp;M) poker player told me about his bad experience with the IRS. He won about 100 K over about a two year span at the Bicycle Casino in Los Angeles County, CA; and stashed his cash at the player’s bank at this casino. Somehow somebody else was aware of his keeping his bankroll in the player’s bank and reported same to the IRS (at this time there was a ten-percent reward for helping to nab people who didn’t report all of their income). He told me that he was now obligated to pay the IRS about $500 per month for years – this guy was very bitter. He suspected that the IRS informant worked in the cage at the Bicycle Casino.

I also met another guy “B&amp;M poker player who had a similar experience, and had to make monthly payments to the IRS for an extended period of time. He said, “This was a very bad experience for me.”

The moral of this is: “Some people get caught.”

[gaming_mouse]

Carl,

Thanks for the story. If I start making 100K, I would report most of it for sure. For the amount I make now, it doesn't make sense to (I don't think), as there is little risk of getting caught.

Anyway, I'd still like to learn more facts about how it works, and what methods the IRS uses. From the responses here, it seems like they have everyone scared into submission, and nobody really knows what methods they have access to, but just assumes that they are omnisicient and all-powerful.

My point is just that there are also some people who don't get caught, and I don't think it's just a matter of luck.

gm

[david050173]

[ QUOTE ]
[ QUOTE ]
This is wrong as it would be trivial for the US to prevent(technically make it really hard for the average user) access to party servers so party has a lot to gain by not offending the US.

[/ QUOTE ]

David,

Could you explain? From what I know about the way the internet works, I don't think it would be trivial at all. But I'm not an expert by any means.

gm

[/ QUOTE ]

First off I don't know how exactly it is done, but china and other countries have blocked tons of sites. I can imagine a couple of ways to do this
1) Go the DNS server and remove party poker.
2) there are not a lot of cables going out of the country. Set the routing tables for those to drop all packets to the party poker server
3) require ISPs to run stuff through a proxy. If you just had the top 5 isps to go along with you (AOL,Comcast, SBC, Verizon) you would be able to cut off most users

Obviously these require the help of the companies running the name servers and pipes. In the past companies like MCI, AOL and sprint have had no problem helping the government out. There are ways around these which is why filtering is a losing battle but they could make it very tough for the average user.

[GuyOnTilt]

Hey GM,

2. Cashout using NETELLER, and then withdraw the money using a Neteller ATM card. This is easy and convenient, but probably not too safe. That is, I have no idea if the IRS could get access to your Neteller records or not. Anyone know?

Although Neteller isn't a US operation, I'm almost positive their ATM cards issued here in the US are routed through a US bank. You can check. The "safest" way is to get mailed a check and cash it through a check cashing place and pay the percentage fee. I've never used one, but I would imagine if your check is over a certain dollar amount there would be extra paperwork involved, so you'd want to keep the checks on the light side. The real "safest" way is to claim your winnings as income, like you're legally obligated to do. If you want tax reform, start voting (http://www.fairtax.org) like it.

GoT

[gaming_mouse]

Hey GoT,

Thanks for the reply. It pretty much confirmed what I suspected.

gm

[Wake up CALL]

[ QUOTE ]
Carl,

Thanks for the story. If I start making 100K, I would report most of it for sure. For the amount I make now, it doesn't make sense to (I don't think), as there is little risk of getting caught.

gm

[/ QUOTE ]

Now this is poor thinking, the penalty for getting caught is the same whether it is for $1000 or $100K. You should be thinking the opposite of what you are.

See Title 18 USC § 371 for the penalty for conspiracy to commit tax fraud.

[Oski]

[ QUOTE ]
[ QUOTE ]
I played HE with a guy a casino one time who asked a lawyer about reducing the amount of taxes he had to pay on his winnings. The lawyer told him to withdraw a bunch of money from an ATM every time he went to the casino and keep a receipt for it. With cash payouts, there is no way the IRS could prove that you DIDN'T lose the money gambling.

[/ QUOTE ]

That seems a bit sketchy/urban legendish. Lawyers get disbarred for recommeding illegal actions to thier clients. Not to mention in tax court, the burden of proof for a lot things are with the taxpayer not the irs.

[/ QUOTE ]

Nothing illegal here. The lawyer merely stated that the client should take out a large amount of money and keep a receipt. What the client does from there is left to the imagination.

[SinCityGuy]

[ QUOTE ]
He told me that he was now obligated to pay the IRS about $500 per month for years – this guy was very bitter.

[/ QUOTE ]

It never ceases to amaze me how people who break the law and get caught are bitter.

[BusterStacks]

[ QUOTE ]
I played HE with a guy a casino one time who asked a lawyer about reducing the amount of taxes he had to pay on his winnings. The lawyer told him to withdraw a bunch of money from an ATM every time he went to the casino and keep a receipt for it. With cash payouts, there is no way the IRS could prove that you DIDN'T lose the money gambling.

[/ QUOTE ]

This is by far the best option in terms of risk/reward ratio. Don't dodge the taxman unless you want to live your whole life that way. If the interest catches up to you in 5 years like it did to my uncle, you can owe nearly double what you tried to avoid. Not to mention long term concerns such as retirement and insurance, which will be accounted for by your income.

[TorontoCFE]

It makes me shake my head when people think the risk of getting caught are 0. Contrary to what many people think, the government watchdogs are not stupid. They have seen and know more about money laundering and tax evasion than you do.

I have spent a good deal of time investigating these things freelance - I'm not going to jeopardize my license and government security clearance, but I can assure you that
directly depositing into your bank account will be uncovered 100% of the time you are investigated. Now the chance you are audited may be close 1-2% and small $ amounts may be lower risk so you can weigh the odds of breaking the law for yourself - only you can decide whether the 20% or so of your win is worth a potential vacation on Uncle Sam.

There are much "better" ways of evading taxes and laundering money than you have suggested. You're going to need luck on your side.

[TorontoCFE]

Actually, they don't have to prove you lost the money gambling.

First they may wonder why you kept gamlbing if you always lost (assuming you don't report a reasonable win rate).
Then they would perform a net worth and income analysis to see how you could afford your lifestyle given substantial, recurring loses.

A good investigator uncovers this scheme about 70-80% of the time in my experience.

[TorontoCFE]

"As for taxes, long live "gambling-winnings are tax-free" Canada "

It is half-true statements like this that make me certain there there will always be a need for accountants.