#41
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Re: Taxes and On-line Gambling
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I don't know the laws of your state, but it is probably just a fine if they actually cared enough to pursue it. If the IRS finds intentionally undeclared income it could involve jail time (depending on the amounts involved), and they DO care enough to pursure it. They care a lot. Much like the mob, they don't care about fairness, rationalizations, stories, or ethics; they just want their f'n money. [/ QUOTE ] Good point - I'm not sure what the penalty is if the state nabs you. (Time to Google...) I also really like that analogy. The IRS is exactly like the mob, but without the sense of tradition... |
#42
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Re: Taxes and On-line Gambling
One of the more infamous people to ask your question, albeit regarding a different criminal activity, was Al Capone. He died in prison, if I recall, where he was residing after his income tax evasion conviction rather than his other crimes. I don't mean to suggest that an internet poker player is going to go to prison for not reporting on-line poker winnings, but only suggest that oftentimes the feds have an easier time prosecuting non-reporting of income than the underlying crime. But you pays your money and you takes your chances.
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#43
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Re: Taxes and On-line Gambling
Keep in mind that gambling, per se, is not against either the state or federal law. You can freely gamble wherever gambling is legally permitted. On your tax return, you don't say diddly about where or when you gambled. You just put down figures, one in Other Income and one on Schedule A, Gambling losses. Nothing illegal about either figure, and no inherent implications. If you get audited, the risk may exist, but only to a very, very small degree, that your records could engender some interest, but by and large (various new federal laws nothwithstanding) info gleaned by the IRS relating to underlying activities generally is not passed on to prosecuting authorities, state or federal. This is not to say it can't or will never happen.
My worthless advice to everyone is to pay your taxes as best you know how, using whatever rationale you may think will fly. You can argue about the method later on if necessary, but at least you have a "good faith" argument that you have complied with the tax law. |
#44
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Re: Taxes and On-line Gambling
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While the money is at the casino, it is technically considered "spent" since a casino is not a bank. TT [img]/images/graemlins/club.gif[/img] [/ QUOTE ] A poor interpretation on your part. The same defense was used by B&M gamblers stating that while their money was in chips they did not really have control of the funds. The IRS tax court found against them and they were ordered to file sessions as specified in the IRS regulations. I do not see how your opinion/interpretation would be any more successful. |
#45
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Re: Taxes and On-line Gambling
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... The IRS tax court found against them and they were ordered to file sessions as specified in the IRS regulations.... [/ QUOTE ] Do you know off hand how the regulations specified "sessions"? I haven't been able to find any reference in my online searches. |
#46
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Re: Taxes and On-line Gambling
[ QUOTE ]
[ QUOTE ] ... The IRS tax court found against them and they were ordered to file sessions as specified in the IRS regulations.... [/ QUOTE ] Do you know off hand how the regulations specified "sessions"? I haven't been able to find any reference in my online searches. [/ QUOTE ] Yes, a session is specified as anytime you make a table change. Required records are the table number, the location, names and contact numbers of witnesses and the gain or losss from each session. Revenue Procedure 77-29 and IRS publication 529 will outline this more completely. This link is not relevant to your question on a session but does elaborate on gambling income and expenses IRS Topic 419 |
#47
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Re: Taxes and On-line Gambling
Thanks. Seems perfectly applicable to Internet poker to me. Does it to you?
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#48
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Re: Taxes and On-line Gambling
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#49
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Re: Taxes and On-line Gambling
J.R.
I agree that his definition looks good to me and likely the IRS as well. I'd speculate that keeping an accurate diary would overcome any minor details encountered during an audit such as a specific session definition. |
#50
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Re: Taxes and On-line Gambling
Great link. It should be mandatory reading before anyone ever posts another "tax on gambling winnings" question. Thanks!
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