Tax question - Page 2

Leavenfish · #11 09-13-2004, 03:05 PM

I know that when it comes to winnings in Chess tournaments, you are only required to claim income from them if you exceed a certain amount per year in winnings.

Of course, in poker I wonder. If one itemizes, do you also not get to deduct your losses? Your internet access charge...etc?

Also, If you are playing on Party Poker which is overseas...either Canada or the Carribean, i'm not really sure, are THEY going to turn in to the US Government any evidence of money transactions? They are not even required to, are they--why would they be?

Just curious...and the Gods honest truth-- I'll swear it on a stack of bibles, is that I have only ever played the 'for fun' rooms at Party Poker.

--Leavenfish

Bigfish · #12 09-13-2004, 04:17 PM

Thanks for the information. I am not a US citizen only a residence here.

swami · #13 09-13-2004, 04:27 PM

I would use an address in the country of your passport, using a US residence on your overseas account could lead them to disclosing the account to US government requests. Since all your withdrawals will be in the US, if you are audited you could still be caught, any tax evasion is very risky unless you really know what you are doing, as all sorts of complicated scheams have been thought up and tried in the past. The US government has so many tools and with all transaction being recorded electronically there will be a trail of some sort, it is difficult to get away with if you are investigated.

mmcd · #14 09-13-2004, 04:37 PM

[ QUOTE ]

Also, If you are playing on Party Poker which is overseas...either Canada or the Carribean, i'm not really sure, are THEY going to turn in to the US Government any evidence of money transactions? They are not even required to, are they--why would they be?

[/ QUOTE ]

Party Poker would almost certainly not provide the IRS with any documentation of your transactions with the site.

The problems as I see them are:

1. If you get audited, the IRS is going to see all of the cashouts from the site going into your bank account. This is pretty much a certainty, and if you did not properly claim them/pay taxes, you're pretty much [censored].

2. Even if you are not chosen to be audited, if you have people at your bank who aren't the type to "mind their own business", and you have a steady stream of fairly large EFT's coming into your bank account from overseas regularly, they might bring this to the attention of the IRS or some other governmental bureaucracy. (I'm not so sure about this one) Since these EFTs are not "cash" transactions per se, I doubt they would trigger any sort of CTR, but I wonder if any banking personnel would bring them to attention of the government on their own accord, or maybe if there is some kind of distinct reporting threshold/requirement for these types of transactions.

mmcd · #15 09-13-2004, 04:40 PM

I think the major online sites should start offering 100 dollar bills fedexed in a shoe box as a cashout option.

Bigfish · #16 09-13-2004, 04:43 PM

Thanks again. I just received the tax estimate form from IRS. You don't really know how much you owe until you look at that form. It's pain in the neck. The tax problem can be easily solved when I open an account using my brother's name. He is not a residence here in US.

swami · #17 09-13-2004, 04:50 PM

Taxes and poker are a lot simpler if you stick to playing in underground NYC card games.

astroglide · #18 09-13-2004, 06:10 PM

I know that when it comes to winnings in Chess tournaments, you are only required to claim income from them if you exceed a certain amount per year in winnings.

all income has to be reported BY YOU. other people only have to report things FOR YOU when it exceeds a specific dollar amount. rest assured, every nickel you earn is taxable.

Jaquen H'gar · #19 09-13-2004, 07:08 PM

[ QUOTE ]

rest assured, every nickel you earn is taxable.

[/ QUOTE ]

Technically, every nickel is reportable but not necessarily taxable

Leavenfish · #20 09-13-2004, 07:20 PM

[ QUOTE ]
I know that when it comes to winnings in Chess tournaments, you are only required to claim income from them if you exceed a certain amount per year in winnings.

all income has to be reported BY YOU. other people only have to report things FOR YOU when it exceeds a specific dollar amount. rest assured, every nickel you earn is taxable.

[/ QUOTE ]

Forgive me, it's been a tough Monday at work and I can't (don't have the energy to) produce where I have seen this...but I must disagree.

Poker and Chess may be viewed differently by the IRS, but I am pretty certain that (untill recently--I have't played much competively of late), chess players have never been told by the governing body (USCF) that they need to report ALL their winnings. I think it might have to do with a threshold amount or if you derive a significant portion of your income from your winnings--and in that case, you need to keep very good records.

I really do hope that someone will clear this up soon...I have a feeling a lot of people are interested. [img]/images/graemlins/confused.gif[/img]

---Leavenfish