about online gambling being illegal

[tonypaladino]

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What I meant was, that if someone declared their winnings from an illegal source, they are admitting that they participated in a crime. Should't they be arrested?LOL
Shooby

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The IRS doesn't care what illegal things you do to get your money, as long as they get their cut. They do not report or share any information with other government agencies.

[yvesaint]

haha just thinking about taxes and poker and drugs makes me go LOL [img]/images/graemlins/laugh.gif[/img]

[theblitz]

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Isn't that that like a drug dealer paying taxes on his profits?LOL [img]/images/graemlins/laugh.gif[/img]

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Yep.
And in Kansas they are actually able to pay:

http://www.ksrevenue.org/perstaxtypesdrug.htm

[mistrpug]

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What I meant was, that if someone declared their winnings from an illegal source, they are admitting that they participated in a crime. Should't they be arrested?LOL
Shooby

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No because if a tax return were able to be used in this way, people could use the 5th ammendment to not file one.

For all you taxpayers out there:

Can someone pay taxes on winnings by simply writing the dollar amount in the blank for "income from business, investments, etc" which is usually used for 1099 earnings? Or are you required to attach a log of dates played, locations, winnings, etc?

This brings me to my next question, if you know how much you have made in the calendar year but do not have specific logs, what would be the best way to proceed?

Thanks for any comments or suggestions.

[blackaces13]

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A couple factoids from the IRS Website:

Gambling winnings. You must include your gambling winnings in your income on Form1040, line 21. If you itemize your deductions on Schedule A (Form 1040), you can deduct gambling losses you had during the year, but only up to the amount of your winnings.

Illegal income. Illegal income, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity.

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This sounds like a solution for the deductible problem or for people who know how much they've won but don't have specific logs or total win/loss figures. You can just treat it as illegal income since, well, it is.