Question for full-timers

[coffeecrazy1]

Has reporting your income to the IRS been an issue? I would ask if anyone does not report or underreports, but in case any friendly IRS folks are lurking, I will leave it vague. What I am asking is whether or not being audited has become a substantial problem in the professional gambling community.

[Dynasty]

It's only a problem if you lie to the IRS.

[The Dude]

I try to report as completely and accurately as possible. However, I would estimate that maybe 5% of players who win $10k or more report even remotely close to what they really earn.

[Gramps]

Maybe for cash game players, but I'd be willing to bet that the rate for online players (who make > $10k) who report accurately is much, much higher than that. Records of Neteller transaction's with one's bank account can be a strong deterrent to "creative tax reporting."

Also, I'd bet the higher you set the threshold (> $50k, > $100k), the higher the rate of accurate reporting. Off all online players who net > $100k/year, I'd guess > 1/2 (and maybe even > 2/3) accurately report.

(Source: Numbers pulled out of my arse based on semi-educated guesses)

[The Dude]

It's interesting how two people with the same source could come up with totally different numbers.

When speaking of online pros, the added deterrent that a paper trail creates is offset by the average age/ responsibility of the pro. 16-23 year olds genererally don't see the value in paying the appropriate amount of tax, and since they don't themselves keep as accurate records as they should, the round down. Way down.

[LookinSharpe]

Can't you designate yourself as a professional gambler and write off your losses against your wins as a business expense?

If someone buys in for 10k on Neteller and cashes out 25k are they taxed the full amount or only the profit?