Paying taxes in illegal state

[peregrine]

I live in Michigan where internet gambling is illegal. If I pay taxes on winnings, do I run the risk of problems for violating the internet gambling laws?

[MrDannimal]

How much is it? Is there any way you could claim them as general gambling winnings (Greektown has a legal poker room you could pin it on if you were audited), or is it too much money to be able to reasonably explain away (like, $5000 over a year could be $500 a month which shouldn't ever generate action from Greektown to the IRS. $25,000 however...).

Just a thought.

[peregrine]

But if the IRS found out about the source, would there be any risk of that info getting to the state?

[CrackerZack]

No. Check the cardplayer article archives by the Rose guy. IRS doesn't report activity like that. Some old law/rule.