Serious tax problem.. Need advice.
 

I've played poker semi professionally for the past 5 years.. Yesterday I received a large notice from the IRS detailing that I owe them $60,000 from the year of 2001 only. I have no idea how they came up w/ this amount, seeing as how I haven't filed a tax report of any kind. I have nowhere near enough to my name to pay this off as I have lost/spent tons on my many vices, and I also fear there may be more charges coming now from the years of 2002-2004. Does anyone know what the best possible option is to deal w/ this?

People have recommended the following to me:

1) Declare bankruptcy, I'm unsure if this works though. Some things that I've read say yes, some say no. Does anyone know?

2) Attempt to make a deal w/ the IRS. What kind of deals does the IRS make? Am I able to bargain down the amount I will pay, or perhaps make a small monthly payment?

3) Flee to Canada. Is it at all possible to get out of this by moving to Canada? How do tax laws work for internet poker? Do you pay taxes where you live, or where you are a citizen?

If anyone has any answers to these questions, or any suggestions of any kind I'd GREATLY appreciate it.

Thanks.

Re: Serious tax problem.. Need advice.
 

See, 20-year old internet poker pro that constantly wonders in the Zoo why he has to pay taxes on his winnings, that's why you decalre and pay taxes on your winnings.

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As for your specific question, if you want to continue living outside the confines of your local federal pound-me-in-the-ass prision, you're going to have to pay off your debt plus interest plus penalties. You'll likely be able to work out a payment plan with the IRS where your wages get directly garnished. Of course, they'll expect you to live off pittance for the next 10-15 years, but that was the decision you made four year ago to not pay your taxes.

Re: Serious tax problem.. Need advice.
 

I am by no means qualified to answer your questions but I think more info is need for someone who is.

Did you file any tax returns from 2001 onward? Did you have any other income besides poker? Did you report it? What are you living on? What is your life style (3 car garage with a boat in the back yard or a cheap apartment with a old clunker)?

Re: Serious tax problem.. Need advice.
 

Well, needless to say I realize this .. Either way, all I can do now is find the best option to deal w/ the problem at hand. So any suggestions would be appreciated.

Thanks.

Re: Serious tax problem.. Need advice.
 

Disclaimer: I am not an expert.

The IRS does not want to put you in prison. They want to make sure that they get their share of your earnings. They can help you pay in installments, or come to some sort of compromise. However, you need to take action. If you ignore their communication you will be in bad shape. They are able to freeze your bank accounts, seize your assets, etc. I recommend hiring a professional (Tax Attorney, CPA, Enrolled Agent) as soon as possible, before things get even worse. Good luck

Re: Serious tax problem.. Need advice.
 

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I recommend hiring a professional (Tax Attorney, CPA, Enrolled Agent) as soon as possible, before things get even worse. Good luck

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The best advice you've probably already gotten and will continue to get. Nobody here is an expert (well, that I know of) and a situation like this requires the advice of someone who has dealt with this before.

Re: Serious tax problem.. Need advice.
 

Here are the sad but true answers to those questions..
Poker was my only income, and I have never filed a tax return on it. My current lifestyle is living in an apartment and driving a used car.

Re: Serious tax problem.. Need advice.
 

My biggest question is probably.. Does declaring bankruptcy get you out of tax debts?

Re: Serious tax problem.. Need advice.
 

It depends upon the situation. The law is complicated here. My guess is because you did not file taxes, bankruptcy will not erase your debt. But I am not certain. Hire a pro

Re: Serious tax problem.. Need advice.
 

[ QUOTE ]
3) Flee to Canada. Is it at all possible to get out of this by moving to Canada? How do tax laws work for internet poker? Do you pay taxes where you live, or where you are a citizen?


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How is this going to help you? You just can't run away and not pay your taxes. This is pretty serious. Your best bet is to get yourself an attorney and work out some deal with the IRS.

FWIW, I'm canadian and I just finished filing my 04 taxes. I paid taxes on my poker winnings, stocks profit as well as my regular job. When I finally finished I felt like a daggar had just stabbed my heart. I've paid more in taxes some people make in a year. [img]/images/graemlins/mad.gif[/img]

The tax laws regarding internet gambling is still sketchy here in canada. I decided to pay it all because I'm trying to avoid a potential problem like the one you described. Also because I've made so much I want to be able to sleep at night. My potential earnings in poker is a lot higher than what it is now and I don't want to get myself in any situation which will take me away from this , ie going to jail. This would hurt me and my family much more than the amount of taxes that I'm paying.
Moral of the story, pay your taxes!! You can't hide from the government. Unless of course you play B&M poker in canada and hide your money under a mattress.