[juris]

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Why is everyone so gung ho about taxes on this site? First of all, the IRS is not going to know about winnings that you keep on a poker site. They do not devote precious and valueable resources to investigate this deeply into someone who makes less than 40k a year. The cost vs reward is too small, it is simple economics. As a result, one could easily just keep the money in their account until after they graduate. Then when you withdrawal, you will have to report more money at one time, but it will not affect your FASFA.

Secondly, the IRS generally makes people simply pay the taxes they did not when they underreport by a small amount. You're not going to get thrown in jail or pay any substatial fine. If you get caught, you'll pay up, it's EV+ IMHO. Everyone, flips out everytime a post like this comes up. Maybe it's because they feel its unfair if they pay and someone else gets away with not paying it. But when it comes down to a college education, I think OP needs to find a way to avoid losing his grants.

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I am going to say this as kindly as I can. First, any income you generate, including online poker, is earned income. It is thus reportable.

Second, records do in fact exist of your gains and losses. Check your history on any poker site, and you'll see it there clearly.

Third, the penalties are HUGE. They can be negotiated down, but that will require a lawyer (and no I'm not offering my services, I'm not an experienced enough tax lawyer) and you will pay.

If you were referring to $500 in poker winnings, you're probably right. If you're talking about $20K, you are seriously wrong. There is a law that allows one to report gambling winnings without fear of penalty, even if they were online.

Finally, there are people in the government trying to put the noose on online gambling. They will use the tax code-think Al Capone. Some will get away clean, true. Some will decide to take the risk, true again. But to give carte blance advice not to worry is beyond misinformed and doesn't due squat for someone trying to assess the risk.