Besides the Ethical Implications........

mscags · #1 08-19-2005, 01:16 PM

....What makes players claim all of their poker winnings? It seems to me that the gvmt has no way of tracing this. I just don't understand, there is no way that the IRS can possibly know how much money is in my party account, etc. Onc you withdraw and it goes on your bank activity maybe, I'm not sure how it all works really, but if the money is just in your account, how can they know? Not saying it is ethical to not claim, just wondering about it.

RunDownHouse · #2 08-19-2005, 01:25 PM

I'm not a lawyer or accountant or anything, so with that in mind:

They don't know about it if its all on a poker site, and even if they did, there's a chance they wouldn't be able to tax it anyways. To the best of my understanding, the US can't tax foreign income earned until it is repatriated into the US system. There seems to be a strong argument that poker is foreign income, since the sites are based outside the US, but of course its a gray area, and there haven't been any court decisions on it that I know of.

I claim my winnings, but only to the extent of what I've actually taken off-site and into my bank account.

PoorLawyer · #3 08-19-2005, 01:44 PM

It is a voluntary tax system so you don't have to claim anything and they probably won't know about it. The one time you get audited though and see funds going into or out of neteller and start poking around is where it all could blow up in your face. That being said, i just file the EZ form without thinking about it.

RunDownHouse · #4 08-19-2005, 02:26 PM

I'm assuming that they don't know about funds on sites like Party. Could they see funds in NETeller, since those are connected to a bank?

mscags · #5 08-19-2005, 02:56 PM

Whats the EZ form?

wmspringer · #6 08-19-2005, 06:25 PM

[ QUOTE ]
Whats the EZ form?

[/ QUOTE ]

1040-EZ, also known as the short form
For those who don't itemize deductions

J_B · #7 08-19-2005, 07:53 PM

It's another Gambool. Are you willing to accept the risk of the IRS asking for their cut and possibly some fines and interest vs. the chance the will never find it.

#8 08-19-2005, 03:34 PM

[ QUOTE ]
I claim my winnings, but only to the extent of what I've actually taken off-site and into my bank account.

[/ QUOTE ]

StellarWind · #9 08-19-2005, 04:39 PM

[ QUOTE ]
To the best of my understanding, the US can't tax foreign income earned until it is repatriated into the US system.

[/ QUOTE ]
IANAL either, but I am 99.9% certain this is completely wrong.

You incur tax liability when you win the money. Where you keep the money or when you move it offsite or back to the U.S. is irrelevant.

It is likely that some future deal will be made to fully legalize online poker in the U.S. If this happens Congress will undoubtedly insist that the online sites cooperate with the IRS. It will be the price they have to pay to stay in our market.

Party might turn your old records over to the IRS in a few years. Don't ever say you weren't warned.

mscags · #10 08-19-2005, 08:13 PM

So the only way that they could ever find out how much money is in your account is if they got your transaction history from party? My question is how do they even know that you have an account? For example, say I make 20K this year and keep all of it in my account. Never withdrawing any of it. Is there any reason for the IRS to even think that I have an account at an online gaming site? How would they even know which one? There are a lot.

On a related note. Should rakeback and bonuses be taxed as well? Could you consider them a "gift"?