Besides the Ethical Implications........ - Page 7

FlyWf · #61 08-21-2005, 10:19 PM

Uh, it's stupid because the IRS doesn't make money from catching cheaters. It arrests, tries, and then sends them to jail, all of which costs the government even more money. It's not a zero sum situation. Christ.

Python49 · #62 08-22-2005, 12:24 AM

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There seems to be quite a few idealistic 20-year olds on this website that have no inkling of a clue about dealing with the IRS. The IRS has one mantra: presumed guilty until proven innocent. The burden of proof isn't on them to prove you evaded, it is on YOU to prove you didn't. Read it again and learn it.

The IRS will see some gambling on your return and either straight up audit you or more likely these days, try a maneuver we are all familiar with. You know how when you flop a hand in the blinds that may be best or not you will make a bet to see where you stand? The IRS does this. They will send you a letter stating they feel you underreported your gambling income by X amount and thus owe them so much in taxes and penalties. Notice, this is before you are even officially audited. They are trying to smell blood in the water. The ONLY answer to an inquiry like this is a letter from YOUR CPA telling them you will GLADLY provide your records just to show them they are wrong. This is like raising the timid bet from the blind player. They will usually fold or try to save face by requesting a document or two then dropping it. If you don't have a CPA on board, they will look at you like you're a weak tight player and try to run roughshod over you.

If you get audited and a single neteller withdrawal is listed on your checking account, that's it; the cat is outta the bag. They DON'T have to ask/subpoena Neteller, all they do is tell YOU to provide your Neteller records. Failure to comply is not an option. On Neteller, they will see Party/Empire/Paradise etc. You will then be asked to provide entire transaction records for each of these sites. Once again for the slow, they DON'T have to subpoena Party, you'll do the work for them. That's not to say they won't ask Neteller/Party etc and if these groups cave, you had better hope the records you provide match theirs.

Most online gamblers think the WTO putting pressure on US gov't to allow online gambling is good. When the US govt allows this, the reciprocal will be Party etc being required to open their records. Then all it will take is one Federal judge caving to the argument that the US govt is losing massive amounts of tax dollars to unreported online gambling income or caving to the argument that terrorists are getting funds by dumping at online sites then a blanket subpoena will be issued and the IRS will ask Party to provide the names of every single US citizen who gambles online. This list will be run against tax returns and booyah. This is about 12-24 months away, possibly.

You think this is paranoid. Can't happen you say. The govt is already holding (for better or worse) people prisoner without charges/court proceedings/trials all in the name of national security. Do you think it will balk at this? Is the govt/IRS evil? Of course not; if they were, they would be easier to deal with. No, they are just a bunch of career bureaucrats with good intentions.

Of course, we know what the road to hell is paved with...

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That's if you get audited. I talked to a CPA and he told me theres more than a 99% chance you wont get audited. Sounds +EV to me.... all these poker players here and nobody likes those odds eh?

Python49 · #63 08-22-2005, 12:28 AM

I honestly wonder how they handle it if an 18 year old who really is genuinely ignorant about taxes makes alot of money online and had no clue about paying taxes on his money. I certainly had no idea you had to pay taxes on earnings until doing the research. They bust his youthful ass anyway I presume? Couldn't a good lawyer get him off? I heard there was a case where a gambler got off by not paying taxes.

#64 08-22-2005, 12:43 AM

Ignorance is no defence in law. So....

Move to the UK, none of that paying tax on betting...

#65 08-22-2005, 02:40 AM

The corporations pay only 15% of total taxes today while 50 years ago they paid 50%. Thanks to tax havens they avoid paying their share. So i say [censored] the IRS they should go after the corporations moving our jobs to communist China instead of people trying to pay for college. When I withdraw large amounts of money I do a member to member to my grandma in Europe and get the cash tax free when I visit.

jrz1972 · #66 08-22-2005, 08:44 AM

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If you get audited and a single neteller withdrawal is listed on your checking account, that's it; the cat is outta the bag. They DON'T have to ask/subpoena Neteller, all they do is tell YOU to provide your Neteller records. Failure to comply is not an option. On Neteller, they will see Party/Empire/Paradise etc. You will then be asked to provide entire transaction records for each of these sites. Once again for the slow, they DON'T have to subpoena Party, you'll do the work for them.

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jrz1972 · #67 08-22-2005, 08:48 AM

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I honestly wonder how they handle it if an 18 year old who really is genuinely ignorant about taxes makes alot of money online and had no clue about paying taxes on his money. I certainly had no idea you had to pay taxes on earnings until doing the research. They bust his youthful ass anyway I presume? Couldn't a good lawyer get him off? I heard there was a case where a gambler got off by not paying taxes.

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I'm not an expert on tax law, but my understanding of the issue is that you're very unlikely to be looking at prison time in a situation like this. (That's usually reserved for people who were making a deliberate, concious effort to conceal income, not for people who are just stupid and oblivous).

However, the government is not going to say, oh you're only 18 so ha ha we'll just let it go. You will still be assessed back taxes owed, plus interest, plus penalties.