Will paying taxes on your winnings get you "tagged" for future years??

[teddyFBI]

I've considered conscientiously reporting my $30,000 in poker profits on my 1040 and paying taxes, because since I'm in grad school and have no other income, I'll be in a very low tax bracket, and stay on the good side of the law.

I'm a little hesitant, though, only because I'm worried that the IRS might "tag" my as a gambler, and therefore look for reasons to audit me in future years when I'll have a high paying job, and hence be responsible for up to 38% tax on my gambling winning for those years...

Without turning this thread into a "should I pay taxes on my poker winnings" thread, do you think that dutifully reporting my winnings and paying taxes on them will make the IRS or other authorities more skeptical of future tax filings that do NOT report any gambling income?

[CPA]

I am not aware of any special IRS "tag" that you are referring to.

Most of the IRS review of tax returns is done via computer....meaning if you get a W-2 and don't report the income, then you are likely to get a notice.

However, unless your gambling earnings come from a 1099, the IRS won't necesarily know about the income.

However, if you are unlucky enough to get audited, then you might have some things to worry about. First, you would have to answer the question " I noticed you had gambling income last year, did you stop gambling , etc. etc." In addition, an auditor would likely find the $30k anyway by looking at your bank recs, etc.

In general, paying your taxes is a good thing.

[Jaquen H'gar]

What's going to trigger is an otherwise unemployed person reporting income of 30k from gambling.

"From gambling? Nobody makes money gambling, everybody loses money unless they hit a slot jackpot. So, Joe, do you think this kid is running a sports book for his college buddies or do you think he's selling weed? Either way, I'm sure he's underreporting. Flag him."

You better have good records. Needless to say, if you report any substantial amount gambling, you better report ALL of it, at least all that leaves a trail.

This exact thing happened to a smalltime pro BJ player I know. This person was investigated for money laundering. The IRS agent stated he didn't believe people could make a living gambling in a casino. Of course poker is different, especially now with it being highly publicized in society.

[UncleDuke]

[ QUOTE ]
The IRS agent stated he didn't believe people could make a living gambling in a casino.

[/ QUOTE ]

Unless the IRS agent was just saying that in hopes of pressuring the guy into admitting to something, he must've been born under a rock. Who hasn't heard of card counters? Granted, it's not as easy to do as it used to be, but how many people don't know that there are people who do it?

[Jaquen H'gar]

[ QUOTE ]
[ QUOTE ]
The IRS agent stated he didn't believe people could make a living gambling in a casino.

[/ QUOTE ]

Unless the IRS agent was just saying that in hopes of pressuring the guy into admitting to something, he must've been born under a rock. Who hasn't heard of card counters? Granted, it's not as easy to do as it used to be, but how many people don't know that there are people who do it?

[/ QUOTE ]

The problem is that most card counter pros don't play under their real name, thus there is no record of casino play to back them up. This is good from a profit standpoint but not for butting heads w/IRS.