Re: Clarifications about Tax
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under what circumstances would the IRS look at my account? I am still a dependent, I barely have any net winnings and as far as official records go I have never held even a part time job.(i worked for my aunt for a summer)
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If you are subject to US tax laws, and if you have made $10,000 playing poker and you don't declare it and pay taxes on it, you are in violation of the law, period. Your age, dependency, other employment, the legality of your winnings, etc., etc., are irrelevant. There are a number of ways you can come to the attention of the IRS. For one thing, anyone who knows you play poker and who doesn't like you (like, say, a dumped girl friend) can drop a dime on you and will receive a financial reward if it turns out you have income you didn't declare and pay taxes on. I dare say I myself could make a few bucks by telling the IRS the screen names of all the silly folk who have publicly declared on 2p2 that they don't pay taxes on their poker winnings. The IRS could identify the persons behind the screen names without difficulty, and then the fun would begin. Not of course that I would do such a thing, but I could, and so could anyone else. Banks and other financial institutions send information on accounts to the IRS which matches up what is in people's accounts with what is in their returns. Discrepancies invite audits.
I knew someone who was hounded by the IRS on the grounds that he had not declared money from student bribes (for undeserved good grades). There were, of course, no bribes and no undeclared income, but there was a large pain in the butt for this fellow until it was straightened out. My assumption is that some disgruntled student angry about his/her grade informed the IRS as a means of vengeance that this guy was taking bribes , and the IRS obligingly made his life a misery for a while. He did not have any undeclared income, but if someone drops a dime on you and you do have undeclared income, you are in serious trouble. You can gamble that you won't come to the attention of the IRS, but if you lose, you can lose big. The best you could hope for is that they decide you are an ignorant fool, rather than an out and out tax-dodging crook.
And once again, it is not simply a matter of net winnings....
Get yourself some real advice from a professional knowledgeable in the application of tax law to gambling income. If you get caught, the best that can happen is being required to pay back taxes embellished with penalties, interest, and fines. In the worst case, you go to the federal slammer for a while.
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