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#11
10-31-2005, 02:05 AM
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Re: yes another TAX question....
[ QUOTE ]
Other then your own PT and written records, what records could you possibly provide? This is one thing about poker that kind of sucks/ worries me. I can't really prove anything as far as wins losses and total money goes. I just have to be honest and hope I don't get audited, because if I did, I have no idea how in the hell I could possibly demonstrate that my figures were accurate. [/ QUOTE ] If you can't provide proof and you've at least tried to be honest, and your reportings match money entering your income, how do you think the IRS is going to prove that you have been fraudulent? 
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#12
10-31-2005, 02:07 AM
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Re: yes another TAX question....
[ QUOTE ] I didn't want to give him a number that included money on say party because I didn't think it was taxable until I withdrew it from site. [/ QUOTE ] It's taxable as soon as your session ends, but it is very difficult and not worth IRS' time to figure this out. It is rather easy, however, to figure out what you have withdrawn from the site. As a result, people can most likely "get away" with only reporting what they withdrawal into US accounts. However, unless you plan on losing the money, or permanetly keeping it in cyberspace, you are going to have to pay taxes on it eventually. I think your accountant is trying to tell you it would be best to not report your full winnings, but that's just my opinion.
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#15
10-31-2005, 12:08 PM
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Re: yes another TAX question....
If you come up with a good answer, let me know because I have the same problem. Heres how I see it.
1) I dont know exactly what I owe and neither does the IRS, but I want to pay my taxes 2) The IRS most likely would never know about my winnings if I didnt report them, so Im quite sure there wont be a problem with NOT reporting winnings that arent withdrawn yet even though legally they should be reported. 3) When it comes to breaking down wins and losses, there is no clear cut clarifiaction on what a session is when youre online. You could report daily results and call them a session, but why not do it weekly, or monthly? Remember that the IRS doesnt even know youre playing and winning. My personal opinion is that at least 90% of people dont report at all. I have no 1099s. As far as I know, my responsibility is to pay my taxes as truthfully as possible. There is no law saying that I have to keep a spreadsheet of every session I play or my results for every day. I dont have to use PT by law. If I didnt keep any records, the only thing I would know (and the only thing the IRS could prove) would be the deposits going into my bank account from Neteller. So lets assume that I have no records. Lets assume that I have deposits into my account totaling $80K for the year. Couldnt I just report the $80K as winnings? I know that Im suppossed to seperate wins and losses, but since I have no records (and there is no law requiring me to keep records), what can the IRS do about my reporting my winnings with no losses reported? Would they really care? There is no place to report HOW you won the money. It could be $80K in lottery winnings, so would they even question it? Like I said , Im trying to do whats right and pay my taxes, but they make it pretty tough to do correctly.
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#16
10-31-2005, 06:03 PM
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Re: yes another TAX question....
[ QUOTE ]
However, those totals do come out ridiculous, and I myself use daily totals/separated by limits. [/ QUOTE ] I use daily totals separated by limits/sites. So 2/4 at Party is a different session from 2/4 at Stars... Acme
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#17
10-31-2005, 06:08 PM
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Re: yes another TAX question....
[ QUOTE ]
If you come up with a good answer, let me know because I have the same problem. Heres how I see it. 1) I dont know exactly what I owe and neither does the IRS, but I want to pay my taxes, you lose 2) The IRS most likely would never know about my winnings if I didnt report them, so Im quite sure there wont be a problem with NOT reporting winnings that arent withdrawn yet even though legally they should be reported. 3) When it comes to breaking down wins and losses, there is no clear cut clarifiaction on what a session is when youre online. You could report daily results and call them a session, but why not do it weekly, or monthly? Remember that the IRS doesnt even know youre playing and winning. My personal opinion is that at least 90% of people dont report at all. I have no 1099s. As far as I know, my responsibility is to pay my taxes as truthfully as possible. There is no law saying that I have to keep a spreadsheet of every session I play or my results for every day. I dont have to use PT by law. If I didnt keep any records, the only thing I would know (and the only thing the IRS could prove) would be the deposits going into my bank account from Neteller. So lets assume that I have no records. Lets assume that I have deposits into my account totaling $80K for the year. Couldnt I just report the $80K as winnings? I know that Im suppossed to seperate wins and losses, but since I have no records (and there is no law requiring me to keep records), what can the IRS do about my reporting my winnings with no losses reported? Would they really care? There is no place to report HOW you won the money. It could be $80K in lottery winnings, so would they even question it? Like I said , Im trying to do whats right and pay my taxes, but they make it pretty tough to do correctly. [/ QUOTE ]
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#18
10-31-2005, 06:15 PM
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Re: yes another TAX question....
Much of number 3 is correct, and it does raise some interesting questions. I'm not familiar with the letters of the law, but when you say it's notmy duty tokeep a spreadsheet, I don't think that's true. THe burden to keep accurate and detailed records may be on you. Is PT required? Of course not, but more than just bank statements may be. Yes, the overwhelming majority of people don't do this properly. Should you? Well, that's for you to decide.
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#19
10-31-2005, 06:32 PM
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Re: yes another TAX question....
[ QUOTE ]
1) I dont know exactly what I owe and neither does the IRS, but I want to pay my taxes [/ QUOTE ] True. But lacking information confirming your story, the IRS' view will be the only one that matters. [ QUOTE ] 2) The IRS most likely would never know about my winnings if I didnt report them, so Im quite sure there wont be a problem with NOT reporting winnings that arent withdrawn yet even though legally they should be reported. [/ QUOTE ] And the IRS *most likely* would not know that mobsters had income from illegal sources. But when they fail to pay taxes on this income, they can still end in jail. Personally, I don't want to rely on "most likely" with the IRS. [ QUOTE ] 3) When it comes to breaking down wins and losses, there is no clear cut clarifiaction on what a session is when youre online. You could report daily results and call them a session, but why not do it weekly, or monthly? [/ QUOTE ] I believe the IRS has made it clear through past rulings that a session is shorter than a month. How much shorter -- week, day, etc. -- is not cleanly defined. [ QUOTE ] Remember that the IRS doesnt even know youre playing and winning. [/ QUOTE ] See John Gotti... [ QUOTE ] My personal opinion is that at least 90% of people dont report at all. [/ QUOTE ] Do you think this is a valid reason FOR YOU to not report? [ QUOTE ] I have no 1099s. As far as I know, my responsibility is to pay my taxes as truthfully as possible. [/ QUOTE ] Which means paying taxes when you win the money, NOT when you withdraw the money... [ QUOTE ] There is no law saying that I have to keep a spreadsheet of every session I play or my results for every day. [/ QUOTE ] The burden of record-keeping is on the individual, NOT the IRS. [ QUOTE ] I dont have to use PT by law. [/ QUOTE ] True. [ QUOTE ] If I didnt keep any records, the only thing I would know (and the only thing the IRS could prove) would be the deposits going into my bank account from Neteller. [/ QUOTE ] Ignorance is no defense. This is something the courts have maintained time and again. [ QUOTE ] So lets assume that I have no records. Lets assume that I have deposits into my account totaling $80K for the year. Couldnt I just report the $80K as winnings? [/ QUOTE ] Not legally. [ QUOTE ] I know that Im suppossed to seperate wins and losses, [/ QUOTE ] No. You are REQUIRED to separate wins and losses. There is a substantial difference. [ QUOTE ] but since I have no records (and there is no law requiring me to keep records), [/ QUOTE ] See above. You are wrong on this one. [ QUOTE ] what can the IRS do about my reporting my winnings with no losses reported? [/ QUOTE ] They can hit you with fines for under-reporting your income. [ QUOTE ] Would they really care? [/ QUOTE ] Maybe, maybe not. Do you want to test them? Are the potential consequences worth the minimal effort required to do things the right way? [ QUOTE ] There is no place to report HOW you won the money. It could be $80K in lottery winnings, so would they even question it? [/ QUOTE ] Again...maybe, maybe not. But is it worth the chance that they will? [ QUOTE ] Like I said , Im trying to do whats right and pay my taxes, but they make it pretty tough to do correctly. [/ QUOTE ] IMO, you are not trying very hard. You are trying harder to make your life easier and to avoid potential tax issues (deduction phase-outs, etc.) than you are to pay your taxes properly. Acme
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