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And what is to stop a winning poker player (who, as I understand it can deduct up to the very amount of his net "winnings" on his tax return) from saying he got $50,000. in deductions from dumping it on some casino game tables over a few nights/weeks?
I know this it 100% illegal and fradulent (tax evasion), but what is to stop one from doing this?


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I think the problem with this trick isn't so much that it wouldn't work as that you'd probably want to eventually use the money for something. If you put it in the bank, the IRS could see you had $50,000 in undeclared money. Also, any cash transaction over $10,000 that you make has to be reported to the IRS by the merchant. So you couldn't use it to buy a car, make a down payment on a house, or any kind of investment. So when you start thinking about tax evasion, its not just a matter of "will the IRS believe this [censored]," you also have to consider what you will do if you get audited down the road and have $1,000,000 in assets and only $20,000 in reported income every year.

Of course if your plan is to just blow through the $50,000 at strip clubs and fancy restaurants, you'd probably be fine.