tax evasion? give me advice

[countit2]

When I win money playing online, I send money back to prepaid atm and than they send me a check. When I do my taxes, should I claim my winnings. If I do will the govt come down on me for illegal internet gambling. If I dont do u think the irs will be curious about all these checks that I have cashed out from prepaid atm.

[george w of poker]

the irs doesn't care about internet gambling as long as they get their cut. and yes you should claim your winnings because if you get audited you will be screwed

[Kurn, son of Mogh]

if you get audited you will be screwed

It depends. The IRS is under the same budget crunch as every other govt agency. Whether you get audited in the first place is a function of several factors, primarily how much you make and how you get paid. So if for the past 10 years you've had primarily W2 reported income and you make less than $100K, you've got about as much chance of being hit by a meteor.

If you do get audited, and the amount of unreported income is small relative to your entire tax bill, the IRS will just charge you interest (usually if the amount is small enough, they'll wave penalty fees if you're a first-time offender). They'll even give you a payment plan if you need one.

Bottom line is that the IRS is already overworked. Their primary targets are people who run cash businesses (Pizza shops, etc.). This is where the lion's share of underreported income is known to exist. So if other than online poker your main job gives you a paycheck, and you don't make any transfers into your bank for $10K or more at a time, you have a very good chance at skating under the radar.

Just remember, as the total dollar value of the transfers into your account goes up, so does the chance for the activity attracting somebody's attention.

Also remember that you can only offset wins with losses if you itemize.

[coolhandsun]

I don't know much about the logistics of taxes in this case. But if you do declare your winnings, make sure you offset any other gambling losses (or deposits). For instance, if you play poker and win money, I believe you can deduct any other form of gambling (sports, blackjack, craps, whatever your poison may be). These, too, would need to be itemized.

Gavin

[KingToad]

This is new to me. I have only started playing online for about 6 months. Will I get some sort of records from Party Poker? I can look at their history and see about the last months worth. For the limits I play $25 NL, I am one of those that only deposits $50 at a time. when it gets to $300-$400, I withdrawl to $50 again. If I lose that I redeposit $50. I have probably made $4000 - $5000 and reloaded with $1000. How do I go about accounting this this, because I am not actually sure what has been "won and "lost". Just a general idea.

[Gildersneeze]

[ QUOTE ]
Their primary targets are people who run cash businesses (Pizza shops, etc.). This is where the lion's share of underreported income is known to exist.

[/ QUOTE ]That's the damn truth. I was a driver/manager for four years, and we paid all our drivers cash under the table; no driver was on record at all. If my old boss got busted, hoooo, boy, was he screwed.

Never happened, though, in all the fifteen years that place was open.

[Kurn, son of Mogh]

You won't get any report from Party (or any other site), nor are any of them subject to US Laws, so the IRS can't audit *them.*

However, your bank keeps records of your transactions. The key single-transaction dollar amount that triggers scrutiny is $10,000, so theoretically, if you never transfer more than $9,999.99 into your account at any single time, all your transactions will pass under the bank's radar. However, the problem arises if you are randomly chosen for an audit by the IRS (which, again, is very unlikely unless your income for the past couple of years has been over $100,000 *or* is primarily non-W2 income [i.e., taxes are not withheld]). In this case, the IRS will get to see *every* bank transaction for the year.