Re: yes another TAX question....
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1) I dont know exactly what I owe and neither does the IRS, but I want to pay my taxes
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True. But lacking information confirming your story, the IRS' view will be the only one that matters.
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2) The IRS most likely would never know about my winnings if I didnt report them, so Im quite sure there wont be a problem with NOT reporting winnings that arent withdrawn yet even though legally they should be reported.
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And the IRS *most likely* would not know that mobsters had income from illegal sources. But when they fail to pay taxes on this income, they can still end in jail. Personally, I don't want to rely on "most likely" with the IRS.
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3) When it comes to breaking down wins and losses, there is no clear cut clarifiaction on what a session is when youre online. You could report daily results and call them a session, but why not do it weekly, or monthly?
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I believe the IRS has made it clear through past rulings that a session is shorter than a month. How much shorter -- week, day, etc. -- is not cleanly defined.
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Remember that the IRS doesnt even know youre playing and winning.
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See John Gotti...
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My personal opinion is that at least 90% of people dont report at all.
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Do you think this is a valid reason FOR YOU to not report?
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I have no 1099s. As far as I know, my responsibility is to pay my taxes as truthfully as possible.
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Which means paying taxes when you win the money, NOT when you withdraw the money...
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There is no law saying that I have to keep a spreadsheet of every session I play or my results for every day.
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The burden of record-keeping is on the individual, NOT the IRS.
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I dont have to use PT by law.
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True.
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If I didnt keep any records, the only thing I would know (and the only thing the IRS could prove) would be the deposits going into my bank account from Neteller.
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Ignorance is no defense. This is something the courts have maintained time and again.
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So lets assume that I have no records. Lets assume that I have deposits into my account totaling $80K for the year. Couldnt I just report the $80K as winnings?
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Not legally.
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I know that Im suppossed to seperate wins and losses,
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No. You are REQUIRED to separate wins and losses. There is a substantial difference.
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but since I have no records (and there is no law requiring me to keep records),
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See above. You are wrong on this one.
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what can the IRS do about my reporting my winnings with no losses reported?
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They can hit you with fines for under-reporting your income.
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Would they really care?
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Maybe, maybe not. Do you want to test them? Are the potential consequences worth the minimal effort required to do things the right way?
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There is no place to report HOW you won the money. It could be $80K in lottery winnings, so would they even question it?
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Again...maybe, maybe not. But is it worth the chance that they will?
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Like I said , Im trying to do whats right and pay my taxes, but they make it pretty tough to do correctly.
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IMO, you are not trying very hard. You are trying harder to make your life easier and to avoid potential tax issues (deduction phase-outs, etc.) than you are to pay your taxes properly.
Acme
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