#41
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Re: Paying taxes on Poker Winnings...
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The critical point is that the IRS cannot share information they have about illegal activities with law enforcement agencies. So whether you are an online poker player, drug dealer, or hired assassin, the prospect of getting arrested for admitting illegal activities to the IRS should not be a deterrent to paying your taxes. [/ QUOTE ] didn't read the whole thread so somebody may have brought it up. But here is my understanding: You are legally obligated to pay taxes on your income. you have no choice. You have to. You also have a 5th amendment right against self-incrimination. So....lets say your source of income is an illegal activity (drug-dealing, pick-pocketing little old ladies, stealing bikes, whatever). If the government was able to use your income-tax filings to attempt to prosecute you for the illegal activity then this would contradict your 5th amendment right that you have to not incriminate yourself. Thus, I believe that it has been worked out somehow (no idea where, when or how....probably a court-decision at some point) that if the government is going to INSIST that you pay your taxes then they can't also use that AGAINST you for prosecution purposes. Basically, your 5th amendment rights supercede any prosecutorial desire to nail you. In no way does the fact that you have to pay taxes mean that the government is condoning gambling. And yes...technically drug-dealers, prostitutes and assassins-for-hire have to pay income-taxes and the government can't come after them in the least. again...this is technically. No idea how a real hit-man or drug-dealer handles their tax-obligation because certainly they would be reluctant to let them know what they're doing even if they can't technically be prosecuted via their tax-forms. Also - there hasn't been a single online-poker player who has been prosecuted for online-gambling. And I'm not particularly worried about it. I am extremely happy that Ed is taking this direction with his article-writing. I know a little bit about the tax thing...but I know there's a helluva lot I don't know and I expect to learn quite a bit from the future articles. |
#42
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Re: Paying taxes on Poker Winnings...
This thing that really sucks about taxes is that the laws were made with absolutely no clue of a non-professional poker player's situation. All this crap about tracking sessions is really, really lame. It can screw you out of things like Roth IRAs since your gross income is a combination of all your winning sessions. Then you need to itemize all your deduction from your losing sessions.
In Illinois, if I don't file as a professional I am going to have to pay taxes on ALL my winning sessions without being able to deduct any of my losing sessions. This is quite possibly the most stupid and unfair law ever. |
#43
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Re: Paying taxes on Poker Winnings...
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It is specifically written in the Canadian tax code that a professional BlackJack player is tax exempt. [/ QUOTE ] Is that so? Please provide a specific section reference. Here is a searchable link; it should be easy for you to find the provision that specifically mentions blackjack and poker: http://canlii.org/ca/sta/i-3.3/ Otherwise please stop trolling here. The law in Canada is that gambling winnings are not taxable except where the income is from a business. |
#44
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Re: Paying taxes on Poker Winnings...
Tax law is quite clear about this. Title 26 of the United States Code, and the regulations promulgated under the Code, require all Americans to include all sources of income, whether legal or illegal, earned in the US or abroad, on their tax returns. Failure to do so can lead to imprisonment. Remember, Al Capone wasn't imprisoned for the murders he committed; rather, he was put in jail for failure to declare on his tax returns the illegal income that he earned.
If you're a US citizen living anywhere in the world you must file a US tax return. -- Russ Fox |
#45
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Re: Paying taxes on Poker Winnings...
Here is the precedent for having to report taxes on illegal income.
FROM: http://www.gamblingandthelaw.com/col...Online_Bet.htm In 1952 Congress created a special tax, which acted like a trap for illegal gambling operators. Bookies who did not pay the tax were charged with tax evasion. Bookies who did, were charged with violating federal anti-gambling laws. The U.S. Supreme Court knocked that out as a violation of the Fifth Amendment's protection against self-incrimination. So the Feds. starting turning illegal operators, and their tax returns, over to state law enforcement agencies as if they were on a silver platter. In 1968 the U.S. Supreme Court said this maneuver also was unconstitutional. |
#46
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Re: Paying taxes on Poker Winnings...
I agree that paying taxes on gambling winnings is an area with a lot of gray and all that. I had another question. I have been playing poker "recreationally" for a few years before I started giving the game any seriousness, therefore I was more of a loser than a winner. Do we get to disount these losses when filing? Now that I am winning more than losing, do I report winnings? The thing is, I did not file in the years that I lost money, so I'm not sure on that matter although I have heard that you can claim a deduction on gambling losses. Confused, Mike
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#47
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Re: Paying taxes on Poker Winnings...
[ QUOTE ]
I agree that paying taxes on gambling winnings is an area with a lot of gray and all that. I had another question. I have been playing poker "recreationally" for a few years before I started giving the game any seriousness, therefore I was more of a loser than a winner. Do we get to disount these losses when filing? Now that I am winning more than losing, do I report winnings? The thing is, I did not file in the years that I lost money, so I'm not sure on that matter although I have heard that you can claim a deduction on gambling losses. Confused, Mike [/ QUOTE ] Technically, you are supposed to report any winning sessions, even if you only had one winning session during the entire year (at least according to my understanding). The fact that you are a net loser during a given year does not exempt you from reporting you winning sessions. It simply allows you to deduct your losing sessions up to the amount of your gross winnings. This means that if you take the standard deduction, you'll end up paying taxes for gambling winnings even though you lost money over the course of the year. It's not fair, but that's how it is, I believe. Also, I'm pretty sure you cannot carry forward deductions from gambling losses from year to year. |
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