yes another TAX question....

[AZK]

OK, this is my first year filing taxes. I'm meeting with an accountant who has talked to my parents and basically just wants me to give him a number. He wants a number of everything both on site and off site. At first this didn't make much sense to me, as I was planning to just give him a number of actual cash I've taken out or deposited to bank account. I didn't want to give him a number that included money on say party because I didn't think it was taxable until I withdrew it from site. Also I didn't want to pay taxes on money that I could potentially lose and then still have to pay taxes since I claimed X and now it's X - Y. I was talking to a fellow 2+2er who said the right way would have been to just use PT and group all wins and all loses and provide that info. with records, etc... The only records I keep are records of when the $ on cyberspace gets moved to the bank or to cash. So WTF should I do? He said it probably looks shady just reporting a # and no records of how/when I got there...thoughts? How should I handle this situation, in the future how should I avoid this headache? I only really use PT on party and not other sites, so I should probably start working up an excel spreadsheet for all, huh?

Thanks.

[BottlesOf]

I'm assuming youlive in the US.

[ QUOTE ]
I didn't want to give him a number that included money on say party because I didn't think it was taxable until I withdrew it from site.

[/ QUOTE ]

This is false. You owe taxes on it, regardless of whether you withdraw it or not.

[ QUOTE ]
he only records I keep are records of when the $ on cyberspace gets moved to the bank or to cash. So WTF should I do?

[/ QUOTE ]

Start keeping records from here on out. Do you not have PT? Get it. If you do have it, then you have all the records you need. As for the past: You are supposed to provide a good faith estimate of wins and losses, and indicate it's an estimate. Your "wins" are the sum of all winning sessions, and "losses" are the sum of all losing sessions. How "sessions" are defined is a little murky, but you should just try your best based on your results.

[AZK]

Yes, I live in the US. Yes, I have PT, but don't use it for certain NL games or for certain sites (prima). This adds to my lack of record keeping. I used to go by the 'every x buyins withdrawal method'. So if I just give the accountant a + number and nothing else, when it gets reported and filed is that suspicious?

[BottlesOf]

Yes. It depends on the number and a host of other things, but you can't just give your net winnings unless you are filing as a professional, which you probably don't want to do as it adds complications.

Why would you not import certain sites or certain limits? Start.

[AZK]

[ QUOTE ]

Why would you not import certain sites or certain limits? Start.

[/ QUOTE ]

Some sites don't support it/don't make it worth the effort for the time it takes/or sometimes it's just pointless for a certain game.

What do I do in my curren situation, being that I have somewhere between 0 and 0 records and just a chunk of cash.

[FishHooks]

whats the common thought around here regarding what a "session" counts as? I've heard each table, but there is no way that would be feasable.

[BottlesOf]

[ QUOTE ]
You are supposed to provide a good faith estimate of wins and losses, and indicate it's an estimate. Your "wins" are the sum of all winning sessions, and "losses" are the sum of all losing sessions. How "sessions" are defined is a little murky, but you should just try your best based on your results.

[/ QUOTE ]

[BottlesOf]

Many people I know just do daily totals. However, what I think a knowledgeable acct. would tell you is (http://www.rbstaxes.com/) if you are multitabling the same limit at the same time, those may be counted as the same session. However, if you start and stop or are playing two different limits, those are separate sessions.

However, those totals do come out ridiculous, and I myself use daily totals/separated by limits.

[LImitPlayer]

What you supply your accountant with is up to you, he does his work based on what you tell him.

If you don't want to be entirely truthful then don't be.

It's not his job to question you as to the legitmicy of your claims, if he does question you find a new accountant.

Accountant can not lie for you, they could get their license revoked so make sure you tell him only want you want him to know.

Many people here will tell you to pay your taxes, do what you want, not what other people think you should do.

I don't know if poker is your sole source of imcome but most self-employed people fudge their books somewhat, however there are many different levels of fudging.

It's up to you to decide

[somapopper]

Other then your own PT and written records, what records could you possibly provide? This is one thing about poker that kind of sucks/ worries me. I can't really prove anything as far as wins losses and total money goes. I just have to be honest and hope I don't get audited, because if I did, I have no idea how in the hell I could possibly demonstrate that my figures were accurate.

[TheHammer24]

[ QUOTE ]
Other then your own PT and written records, what records could you possibly provide? This is one thing about poker that kind of sucks/ worries me. I can't really prove anything as far as wins losses and total money goes. I just have to be honest and hope I don't get audited, because if I did, I have no idea how in the hell I could possibly demonstrate that my figures were accurate.

[/ QUOTE ]

If you can't provide proof and you've at least tried to be honest, and your reportings match money entering your income, how do you think the IRS is going to prove that you have been fraudulent?

[TheHammer24]

[ QUOTE ]
I didn't want to give him a number that included money on say party because I didn't think it was taxable until I withdrew it from site.

[/ QUOTE ]

It's taxable as soon as your session ends, but it is very difficult and not worth IRS' time to figure this out. It is rather easy, however, to figure out what you have withdrawn from the site. As a result, people can most likely "get away" with only reporting what they withdrawal into US accounts. However, unless you plan on losing the money, or permanetly keeping it in cyberspace, you are going to have to pay taxes on it eventually.

I think your accountant is trying to tell you it would be best to not report your full winnings, but that's just my opinion.

[AZK]

I have saved every email that has gone between bank account, firepay/neteller, and poker site, so if I had to produce records I suppose I could, but it would be ugly.

[BottlesOf]

Hopefully/probably you will never have to. My personal belief is to strive to be in as full compliance as possible within reason, just in case.

[iceman5]

If you come up with a good answer, let me know because I have the same problem. Heres how I see it.

1) I dont know exactly what I owe and neither does the IRS, but I want to pay my taxes
2) The IRS most likely would never know about my winnings if I didnt report them, so Im quite sure there wont be a problem with NOT reporting winnings that arent withdrawn yet even though legally they should be reported.
3) When it comes to breaking down wins and losses, there is no clear cut clarifiaction on what a session is when youre online. You could report daily results and call them a session, but why not do it weekly, or monthly? Remember that the IRS doesnt even know youre playing and winning. My personal opinion is that at least 90% of people dont report at all. I have no 1099s. As far as I know, my responsibility is to pay my taxes as truthfully as possible. There is no law saying that I have to keep a spreadsheet of every session I play or my results for every day. I dont have to use PT by law. If I didnt keep any records, the only thing I would know (and the only thing the IRS could prove) would be the deposits going into my bank account from Neteller.

So lets assume that I have no records. Lets assume that I have deposits into my account totaling $80K for the year. Couldnt I just report the $80K as winnings? I know that Im suppossed to seperate wins and losses, but since I have no records (and there is no law requiring me to keep records), what can the IRS do about my reporting my winnings with no losses reported? Would they really care? There is no place to report HOW you won the money. It could be $80K in lottery winnings, so would they even question it?

Like I said , Im trying to do whats right and pay my taxes, but they make it pretty tough to do correctly.

[AcmeSalesRep]

[ QUOTE ]
However, those totals do come out ridiculous, and I myself use daily totals/separated by limits.

[/ QUOTE ]

I use daily totals separated by limits/sites. So 2/4 at Party is a different session from 2/4 at Stars...

Acme

[TheHammer24]

[ QUOTE ]
If you come up with a good answer, let me know because I have the same problem. Heres how I see it.

1) I dont know exactly what I owe and neither does the IRS, but I want to pay my taxes, you lose
2) The IRS most likely would never know about my winnings if I didnt report them, so Im quite sure there wont be a problem with NOT reporting winnings that arent withdrawn yet even though legally they should be reported.
3) When it comes to breaking down wins and losses, there is no clear cut clarifiaction on what a session is when youre online. You could report daily results and call them a session, but why not do it weekly, or monthly? Remember that the IRS doesnt even know youre playing and winning. My personal opinion is that at least 90% of people dont report at all. I have no 1099s. As far as I know, my responsibility is to pay my taxes as truthfully as possible. There is no law saying that I have to keep a spreadsheet of every session I play or my results for every day. I dont have to use PT by law. If I didnt keep any records, the only thing I would know (and the only thing the IRS could prove) would be the deposits going into my bank account from Neteller.

So lets assume that I have no records. Lets assume that I have deposits into my account totaling $80K for the year. Couldnt I just report the $80K as winnings? I know that Im suppossed to seperate wins and losses, but since I have no records (and there is no law requiring me to keep records), what can the IRS do about my reporting my winnings with no losses reported? Would they really care? There is no place to report HOW you won the money. It could be $80K in lottery winnings, so would they even question it?

Like I said , Im trying to do whats right and pay my taxes, but they make it pretty tough to do correctly.

[/ QUOTE ]

[BottlesOf]

Much of number 3 is correct, and it does raise some interesting questions. I'm not familiar with the letters of the law, but when you say it's notmy duty tokeep a spreadsheet, I don't think that's true. THe burden to keep accurate and detailed records may be on you. Is PT required? Of course not, but more than just bank statements may be. Yes, the overwhelming majority of people don't do this properly. Should you? Well, that's for you to decide.

[AcmeSalesRep]

[ QUOTE ]
1) I dont know exactly what I owe and neither does the IRS, but I want to pay my taxes

[/ QUOTE ]

True. But lacking information confirming your story, the IRS' view will be the only one that matters.



[ QUOTE ]
2) The IRS most likely would never know about my winnings if I didnt report them, so Im quite sure there wont be a problem with NOT reporting winnings that arent withdrawn yet even though legally they should be reported.

[/ QUOTE ]

And the IRS *most likely* would not know that mobsters had income from illegal sources. But when they fail to pay taxes on this income, they can still end in jail. Personally, I don't want to rely on "most likely" with the IRS.


[ QUOTE ]
3) When it comes to breaking down wins and losses, there is no clear cut clarifiaction on what a session is when youre online. You could report daily results and call them a session, but why not do it weekly, or monthly?

[/ QUOTE ]

I believe the IRS has made it clear through past rulings that a session is shorter than a month. How much shorter -- week, day, etc. -- is not cleanly defined.


[ QUOTE ]
Remember that the IRS doesnt even know youre playing and winning.

[/ QUOTE ]

See John Gotti...


[ QUOTE ]
My personal opinion is that at least 90% of people dont report at all.

[/ QUOTE ]

Do you think this is a valid reason FOR YOU to not report?


[ QUOTE ]
I have no 1099s. As far as I know, my responsibility is to pay my taxes as truthfully as possible.

[/ QUOTE ]

Which means paying taxes when you win the money, NOT when you withdraw the money...


[ QUOTE ]
There is no law saying that I have to keep a spreadsheet of every session I play or my results for every day.

[/ QUOTE ]

The burden of record-keeping is on the individual, NOT the IRS.


[ QUOTE ]
I dont have to use PT by law.

[/ QUOTE ]

True.


[ QUOTE ]
If I didnt keep any records, the only thing I would know (and the only thing the IRS could prove) would be the deposits going into my bank account from Neteller.

[/ QUOTE ]

Ignorance is no defense. This is something the courts have maintained time and again.


[ QUOTE ]
So lets assume that I have no records. Lets assume that I have deposits into my account totaling $80K for the year. Couldnt I just report the $80K as winnings?

[/ QUOTE ]

Not legally.


[ QUOTE ]
I know that Im suppossed to seperate wins and losses,

[/ QUOTE ]

No. You are REQUIRED to separate wins and losses. There is a substantial difference.


[ QUOTE ]
but since I have no records (and there is no law requiring me to keep records),

[/ QUOTE ]

See above. You are wrong on this one.


[ QUOTE ]
what can the IRS do about my reporting my winnings with no losses reported?

[/ QUOTE ]

They can hit you with fines for under-reporting your income.


[ QUOTE ]
Would they really care?

[/ QUOTE ]

Maybe, maybe not. Do you want to test them? Are the potential consequences worth the minimal effort required to do things the right way?


[ QUOTE ]
There is no place to report HOW you won the money. It could be $80K in lottery winnings, so would they even question it?

[/ QUOTE ]

Again...maybe, maybe not. But is it worth the chance that they will?


[ QUOTE ]
Like I said , Im trying to do whats right and pay my taxes, but they make it pretty tough to do correctly.

[/ QUOTE ]

IMO, you are not trying very hard. You are trying harder to make your life easier and to avoid potential tax issues (deduction phase-outs, etc.) than you are to pay your taxes properly.

Acme

[BottlesOf]

I think you nailed this one spot on.

[GoCubsGo]

I think the IRS needs to change the rules or make them clearer. If somebody reports 95% of their winnings and misses 5% and still gets penalized, then their philosophy will probably be "Fine then, I won't pay anything at all."

[scott2130]

[ QUOTE ]
It's not his job to question you as to the legitmicy of your claims, if he does question you find a new accountant.

[/ QUOTE ]

This is a terrible statement. It IS his job.

Not to the extent of the IRS, but he can lose his license for not making reasonable inquires. The IRS would like it to be more, but you pay him not the IRS. If all you want is someone to prepare your taxes, then go to H&R Block.

In my opinion if your accountant DOES NOT ask you questions then you should find a new one.

Thank god I lose every session so I don't have to worry about paying taxes. Oh wait, maybe it would be worth the hassle....

Donkeys Rule

[baronzeus]

i heard if i file as a pro (i e primary source of income) i dont have to keep track of individual sessions -- that i just report my total net winnings. how false is this statement?

I am a little confused. How does your session length affect your income?

[BlindingLaser]

Okay, I began playing in April of this year. I have Pokertracker, and at the end of each month I have tabulated my total winnings. I also have recorded my rakeback for each month. I am mostly a ring game player, and I did not keep very good records of my tournaments for the first couple months, but have since rectified this. I can come up with a reasonable estimate of my tournament play by subtracting my ring game winnings, my bonii, and my rakeback from my total winnings.

I have several questions:

The first is, if I can exactly determine my net (wins - losses), is that enough? If it is sufficient, then I have nothing further: I've kept track of my bankroll each month, and I know I will be able to determine exactly my net.

The second is, if that's not sufficient, what should I do if I feel that Pokertracker is materially mis-stating my winnings? I'm not sure how often it has happened, but I remember one session where I looked at the cashier, and it said that I was about even, but Pokertracker said I was up substantially.

Thirdly, how should I estimate my tournaments if I need to itemize those? I can probably make a rough guess as to how many I played, my ITM%, and so on, but I did not keep very good records when I first started playing them, and thus my estimate might be horrible.

Thanks for all of your help, I really appreciate it.

Editted to add:

At what point does it become "correct" to file as a pro? I heard something about a level of income being the criterion.

[AcmeSalesRep]

[ QUOTE ]
I think the IRS needs to change the rules or make them clearer. If somebody reports 95% of their winnings and misses 5% and still gets penalized, then their philosophy will probably be "Fine then, I won't pay anything at all."

[/ QUOTE ]

I absolutely agree with you. But this need does not excuse the philosophy. The rules are what they are. We have to live with them until we can get them fixed...

Acme

[AcmeSalesRep]

[ QUOTE ]
i heard if i file as a pro (i e primary source of income) i dont have to keep track of individual sessions -- that i just report my total net winnings. how false is this statement?

[/ QUOTE ]

It is not exactly false...but there is WAY more to it than this...

Acme

[baronzeus]

[ QUOTE ]
[ QUOTE ]
i heard if i file as a pro (i e primary source of income) i dont have to keep track of individual sessions -- that i just report my total net winnings. how false is this statement?

[/ QUOTE ]

It is not exactly false...but there is WAY more to it than this...

Acme

[/ QUOTE ]


haha i had any clue what i was doing.

[iceman5]

[ QUOTE ]
[ QUOTE ]
1) I dont know exactly what I owe and neither does the IRS, but I want to pay my taxes

[/ QUOTE ]

Youve misinterpreted almost everything Ive said


True. But lacking information confirming your story, the IRS' view will be the only one that matters.

How is the IRS even going to have a view, when they have no records whatsoever from any source saying that Ive earned ANY amount of money playing poker? I will report what I think is right. How could they possibly doubt me? There is no evidence one way or another.



[ QUOTE ]
2) The IRS most likely would never know about my winnings if I didnt report them, so Im quite sure there wont be a problem with NOT reporting winnings that arent withdrawn yet even though legally they should be reported.

[/ QUOTE ]

And the IRS *most likely* would not know that mobsters had income from illegal sources. But when they fail to pay taxes on this income, they can still end in jail. Personally, I don't want to rely on "most likely" with the IRS.


[ QUOTE ]
3) When it comes to breaking down wins and losses, there is no clear cut clarifiaction on what a session is when youre online. You could report daily results and call them a session, but why not do it weekly, or monthly?

[/ QUOTE ]

I believe the IRS has made it clear through past rulings that a session is shorter than a month. How much shorter -- week, day, etc. -- is not cleanly defined.


[ QUOTE ]
Remember that the IRS doesnt even know youre playing and winning.

[/ QUOTE ]

See John Gotti...


[ QUOTE ]
My personal opinion is that at least 90% of people dont report at all.

[/ QUOTE ]

Do you think this is a valid reason FOR YOU to not report?Where did I say I wasnt reporting?

[ QUOTE ]
I have no 1099s. As far as I know, my responsibility is to pay my taxes as truthfully as possible.

[/ QUOTE ]

Which means paying taxes when you win the money, NOT when you withdraw the money...

True, but again, what if I dont know how much I won each day or month? What if I only know how much Ive withdrawn? Then thats the only thing I can report

[ QUOTE ]
There is no law saying that I have to keep a spreadsheet of every session I play or my results for every day.

[/ QUOTE ]

The burden of record-keeping is on the individual, NOT the IRS.

The burden of proving Im wrong is on the IRS. They can no longer just say IM owe xx amount and force me to pay it. The law was changed putting the burned of proof on them, but they would have no reason to even suspect that Im wrong since theryre not getting any 1099s or other documents from poker sites. You think theyre going to look at my return and out of the blue say "AH HA!! This guy is lying!?

[ QUOTE ]
I dont have to use PT by law.

[/ QUOTE ]

True.


[ QUOTE ]
If I didnt keep any records, the only thing I would know (and the only thing the IRS could prove) would be the deposits going into my bank account from Neteller.

[/ QUOTE ]

Ignorance is no defense. This is something the courts have maintained time and again.

Ignorance of what? Maybe I have losses in my account that havent been accounted for yet? MAybe I have gains.
No records = no proof.

[ QUOTE ]
So lets assume that I have no records. Lets assume that I have deposits into my account totaling $80K for the year. Couldnt I just report the $80K as winnings?

[/ QUOTE ]

Not legally.


[ QUOTE ]
I know that Im suppossed to seperate wins and losses,

[/ QUOTE ]

No. You are REQUIRED to separate wins and losses. There is a substantial difference.

Great, I'll try to comply with a law that nobody understands. I asked an IRS agent exactly what on online session was and he couldnt give an intelligent answer. grey area

[ QUOTE ]
but since I have no records (and there is no law requiring me to keep records),

[/ QUOTE ]

See above. You are wrong on this one.


[ QUOTE ]
what can the IRS do about my reporting my winnings with no losses reported?

[/ QUOTE ]

They can hit you with fines for under-reporting your income.

With what proof?


[ QUOTE ]
Would they really care?

[/ QUOTE ]

Maybe, maybe not. Do you want to test them? Are the potential consequences worth the minimal effort required to do things the right way?

Minimal effort? Complying with laws that are so garbled is not minimal effort.

[ QUOTE ]
There is no place to report HOW you won the money. It could be $80K in lottery winnings, so would they even question it?

[/ QUOTE ]

Again...maybe, maybe not. But is it worth the chance that they will?


[ QUOTE ]
Like I said , Im trying to do whats right and pay my taxes, but they make it pretty tough to do correctly.

[/ QUOTE ]

IMO, you are not trying very hard. You are trying harder to make your life easier and to avoid potential tax issues (deduction phase-outs, etc.) than you are to pay your taxes properly.

Again, I dont know how to do it "properly". If the IRS wants it done "properly", they should make it easy to do. Ive talked to 2 different accountants and friend talked to a 3rd, and they all gave different answers to these questions.
Acme

[/ QUOTE ]

[321Mike]

[ QUOTE ]
Again, I dont know how to do it "properly". If the IRS wants it done "properly", they should make it easy to do

[/ QUOTE ]

It is easy to report your winnings properly:
1) Track your wins and losses on a per session basis. The term "session" is flexible (it has to be because of the many different types of gambling out there), but you can safely use a daily numbers at the same game and limit. That is, playing .5/1 HE, 1/2 HE, and 1/2 Omaha equals three separate sessions for the day. You can use PT, a spreadsheet, or just a pen and paper as long as you record the results daily.

2) When you file your taxes, the total of all your winning sessions is added to your gross income. And if you itemize, the total of all your losing sessions may be deducted.

It's that easy! Of course, you can look for other tax breaks like the sales tax credit, but that doesn't make you any different than anybody else looking to pay less taxes. That's what accountants are for.

[Chadt74]

"The IRS most likely would never know about my winnings if I didnt report them"

Unless you plan on keeping the money offshore you are incorrect...

[schwza]

[ QUOTE ]
[ QUOTE ]
i heard if i file as a pro (i e primary source of income) i dont have to keep track of individual sessions -- that i just report my total net winnings. how false is this statement?

[/ QUOTE ]

It is not exactly false...but there is WAY more to it than this...

Acme

[/ QUOTE ]

do you have a good reference for this? this is my (limited) understanding.

- you have to qualify to file as a pro. the def's seem pretty lenient.
- you have to pay 15% self-employment tax (this is both employer's and employee's 7.5% fica)
- you can deduct expenses and lump together wins and losses.

[iceman5]

[ QUOTE ]
[ QUOTE ]
Again, I dont know how to do it "properly". If the IRS wants it done "properly", they should make it easy to do

[/ QUOTE ]

It is easy to report your winnings properly:
1) Track your wins and losses on a per session basis. The term "session" is flexible (it has to be because of the many different types of gambling out there), but you can safely use a daily numbers at the same game and limit. That is, playing .5/1 HE, 1/2 HE, and 1/2 Omaha equals three separate sessions for the day. You can use PT, a spreadsheet, or just a pen and paper as long as you record the results daily.

2) When you file your taxes, the total of all your winning sessions is added to your gross income. And if you itemize, the total of all your losing sessions may be deducted.

It's that easy! Of course, you can look for other tax breaks like the sales tax credit, but that doesn't make you any different than anybody else looking to pay less taxes. That's what accountants are for.

[/ QUOTE ]

Youre not telling me anything i dont know. The point is that there are millions of people playing poker. Of course only a small portion of these are winning, but still, alot of these people dont even know you have to report your winnings. Alot of these people also dont use PT or any other kind of record keeping.

Theres no law that says they have to.

If the IRS wants everyone to pay the correct amount, they need to make it easier to do so.

I might be a really good player who is really bad at keeping records. Now at the end of the year if I want to pay my fair share, what do I do? The only thing I can do is make my best guestimate as to how much I won. The IRS has no way of disproving this. How could they? There are no records anywhere.

If I got audited for some reason they could look at all my bank account transactions from Neteller, and they would come up with approx the same amount that I did since thats where I wouldve made my guestimate from.

[moondogg]

[ QUOTE ]
I might be a really good player who is really bad at keeping records. Now at the end of the year if I want to pay my fair share, what do I do? The only thing I can do is make my best guestimate as to how much I won. The IRS has no way of disproving this. How could they? There are no records anywhere.


[/ QUOTE ]

Sure there are records. If you get audited, they can ask for a copy of your Neteller records, and you don't have the option of saying no.

As I understand it, in a deep audit, they look at the money going in an out of sites, and attempt to figure it out for you, developing their own estimate of what you owe. This estimate will almost certainly be favorable to them. At that point it is your responsibility to pay according to their estimate or disprove their estimate. By your own admission, you don't have the evidence necessary to truly prove or disprove anything.

Generally speaking, people (even gamblers) are not as likely to get audited that deeply. More often, they will just ask for some more information/evidence to support what you reported. But if they call you and your answer is "I don't have any records", I'd say you are a lot more likely for a deep audit, and rightfully so.

[okayplayer]

Well, there are alot of replies here, most seem to be correct, but I will throw in my 2 cents, as I did a bunch of research into this before I turned Pro.

You do have to pay taxes on all your winnings, not just withdrawals. If you won it and it is earned, and they don't care if you withdraw.

You are supposed to keep a detailed log of your wins/losses. I track each nights performance with a Excel spreadsheet (if you are interested in this template, PM me and I can send it to you) and I also use PT. But, I think if you don't have these records, I would suggest adding up the total in your acct(s) and subtracting all your deposits and withdrawals, this should give you your wins. This will really fck you up if you aren't filing as a Pro, but I assume you are.

If you file as a Pro, you can claim your Net winnings, and deduct any expenses (travel, computer expenses, rent - the % of it that you use for office space, etc...). You do get stuck paying the extra 7.5% (actually I think it ends up being around 6.8% or so) for Medicare/SS (Self Employment tax), which your employer typically pays. I am not really sure how the difference works out to be if you didn't file pro vs if you did for the Medicare/SS (SE tax). But, I do know that if you don't file pro, you have to add up each winning session and deduct losses. A session would be looked at as each time you sat down at a table (and subsequently left). This is fairly easy to do using PT, but imagine how much your net wins would be - I calc'ed it once earlier this year.

Oh, and the burden of proof is never on the IRS, it's always on you.

PS - If you expect to make any sizable income from self-employment (ala Poker), the IRS expects you to make estmiated quarterly payments.

[ QUOTE ]
Alot of these people also dont use PT or any other kind of record keeping.

Theres no law that says they have to.

[/ QUOTE ]

[ QUOTE ]

IRS Publication 529:
Diary of winnings and losses. You must keep an accurate diary or similar record of your losses and winnings.

You cannot reduce your gambling winnings by your gambling losses and report the difference.


[/ QUOTE ]

I can't imagine a more clear refutation of your theory.

[iceman5]

Sometimes I wonder if some of you guys even read a post before you respond with a one liner trying to sound as smart and witty as you can. Do you put any thought into it before you respond?

Like I said before, I WANT TO PAY MY FAIR SHARE. But lets say I dont have all the proper reocrds for the full year. if the IRS wants to subpeopna my Neteller reocrds, more power to them. They will have access to the same records that Im trying to use to estimate my taxes. They dont have access to poker site records and neither do I.

Lets give an example

Lets say I only played 5 days out of the year just to make this simple.

Day 1...I won $1000
Day 2....I lost $1000
Day 3...I won $2000
Day 4...I won $1000
Day 5...I lost $500

Day 6 I withdraw...$1500 to Neteller and then to my bank.

What do you think the IRS will say when I report $1500 in winnings? Remember that I dont have the records of the 5 playing days, so Im not purposly lying. Im only listing those figures because thats what I would know If kept full records.

My actual winnings are $4000 and losses are $1500 for a Net of $2500.

The correct way to report would be to report $4k in winnings and to write off $1500 as losses. I know all of that. But since I dont have these records, I only know that I took out $1500 of the poker site. If the IRS audits me and subpeonas Neteller records, they will see that I withdrew $1500 which is what I reported. Make sense?

Multiply this times about 350 playing days that I have no records for and you see what Im talking about.

The IRS can find out all about my Neteller withdrawals and deposits and thats perfectly fine with me because Im not trying to hide anything

To take it one step further...let say I was pretty sure I was +$2500 total winnings so thats what I reported. I report $2500 in winnings and write nothing off as losses. I get audited for some non poker rleated reason and they check Neteller and see my $1500 withdrawal. They see I reported $2500 in winnings and you think they will have a problem? Thats very unrealistic.

[AcmeSalesRep]

I'll just give you one simple correction to virtually everything you say...

You mistakenly think the burden of proof is on the IRS.

Acme

[AcmeSalesRep]

[ QUOTE ]
If you file as a Pro, you can claim your Net winnings, and deduct any expenses (travel, computer expenses, rent - the % of it that you use for office space, etc...). You do get stuck paying the extra 7.5% (actually I think it ends up being around 6.8% or so) for Medicare/SS (Self Employment tax), which your employer typically pays.

[/ QUOTE ]

You would owe 15.3% for Medicare and Social Security. If you do not file as a pro, you do not pay any fees for either of these. If you file as a pro, you have to pay both the employee AND the employer portions...


[ QUOTE ]
A session would be looked at as each time you sat down at a table (and subsequently left).

[/ QUOTE ]

This is an acceptable definition of a session...but it is not the only acceptable definition.


[ QUOTE ]
Oh, and the burden of proof is never on the IRS, it's always on you.

[/ QUOTE ]

Right. This is the key item the OP cannot seem to understand.

Acme

[AcmeSalesRep]

[ QUOTE ]
Alot of these people also dont use PT or any other kind of record keeping.

Theres no law that says they have to.

[/ QUOTE ]

The IRS requires record keeping. You can go to jail for tax fraud. The IRS can, at their discretion, consider it tax fraud if you intentionally do not keep records. It is that simple.

Your insistence to the contrary is irrelevant and makes it clear that you WANT to evade your proper taxes.
timate from.

Acme

[Jonny]

acme, you are an idiot.

I agree with iceman 100%. Please claim every dollar in your party poker account, then when you have a 10K downswing, you will have paid taxes on money you didn't earn. Thats great.

You are a moron, and IRS cannot prove anything beyond my neteller account. For all they know, you can claim you won a tourney.

Dumbass.

[Niediam]

And what do you do when they ask to see your Party Poker account balance?

[MyTurn2Raise]

[ QUOTE ]
acme, you are an idiot.

I agree with iceman 100%. Please claim every dollar in your party poker account, then when you have a 10K downswing, you will have paid taxes on money you didn't earn. Thats great.

You are a moron, and IRS cannot prove anything beyond my neteller account. For all they know, you can claim you won a tourney.

Dumbass.

[/ QUOTE ]

It's not up to the IRS to prove anything. It's up for you to prove otherwise. The IRS does not work like criminal court.

[scrub]

[ QUOTE ]
Many people I know just do daily totals. However, what I think a knowledgeable acct. would tell you is (http://www.rbstaxes.com/) if you are multitabling the same limit at the same time, those may be counted as the same session. However, if you start and stop or are playing two different limits, those are separate sessions.

However, those totals do come out ridiculous, and I myself use daily totals/separated by limits.

[/ QUOTE ]

The difference between doing daily totals and "table" totals is hilarious.

scrub

[iceman5]

[ QUOTE ]
[ QUOTE ]
acme, you are an idiot.

I agree with iceman 100%. Please claim every dollar in your party poker account, then when you have a 10K downswing, you will have paid taxes on money you didn't earn. Thats great.

You are a moron, and IRS cannot prove anything beyond my neteller account. For all they know, you can claim you won a tourney.

Dumbass.

[/ QUOTE ]

It's not up to the IRS to prove anything. It's up for you to prove otherwise. The IRS does not work like criminal court.

[/ QUOTE ]

You obviously havent read the Tax rerom law that Bush signed a few years ago.

[DarkKnight]

[ QUOTE ]
[ QUOTE ]
acme, you are an idiot.

I agree with iceman 100%. Please claim every dollar in your party poker account, then when you have a 10K downswing, you will have paid taxes on money you didn't earn. Thats great.

You are a moron, and IRS cannot prove anything beyond my neteller account. For all they know, you can claim you won a tourney.

Dumbass.

[/ QUOTE ]

It's not up to the IRS to prove anything. It's up for you to prove otherwise. The IRS does not work like criminal court.

[/ QUOTE ]

[car ramrod]

[ QUOTE ]
Hopefully/probably you will never have to. My personal belief is to strive to be in as full compliance as possible within reason, just in case.



[/ QUOTE ]

This is good advise.

[AcmeSalesRep]

[ QUOTE ]
acme, you are an idiot.

[/ QUOTE ]

Boy, that sure hurts coming from someone that goes on to show their indisputable ignorance...



[ QUOTE ]
I agree with iceman 100%.

[/ QUOTE ]

What you agree with means spit. All that matters is the tax law. And the tax law is clear on this issue -- the money is taxable when it is won. There is nothing in the law about withdrawals activating the tax burden.


[ QUOTE ]
Please claim every dollar in your party poker account, then when you have a 10K downswing, you will have paid taxes on money you didn't earn. Thats great.

[/ QUOTE ]

Uh...no I won't. And this is even more conclusive proof that you are about as intelligent as my toe jam. When I have a downswing, that will be a deduction against any other gambling winnings from that year.


[ QUOTE ]
You are a moron, and IRS cannot prove anything beyond my neteller account. For all they know, you can claim you won a tourney.

[/ QUOTE ]

Truly LMAO. You spew claims that I am a moron...then you go on and openly talk about commiting tax fraud. That's a real sign of intelligence.


[ QUOTE ]
Dumbass.

[/ QUOTE ]

It is appropriate that you sign your post in this matter. It truly describes you.

Acme