Taxation on Internet Poker

Anyone have any useful reads on this subject? Or have any information? I'm wondering what profits are subjectable to taxation, I'm thinking the income is only taxable once withdrawn from a given poker site into a bank account, however what about money that is currently in a Firepay account linked to a bank account for example?

[DVaut1]

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Anyone have any useful reads on this subject? Or have any information? I'm wondering what profits are subjectable to taxation, I'm thinking the income is only taxable once withdrawn from a given poker site into a bank account, however what about money that is currently in a Firepay account linked to a bank account for example?

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This is probably the wrong forum for this question. Try the Zoo. But anyway...

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I'm wondering what profits are subjectable to taxation,

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If you're an American, my guess is, the IRS's answer to this question is "ALL OF IT". I know I reported all of my winnings to the IRS last year - even what was in my accounts at the various sites I play on, along with what I had in Neteller, etc. And, being the donkey of a poker player that I am, it wasn't a great deal of money, either. If you have made alot of income from poker, consider it even more reason to be extra careful when dealing with the reporting of it to the IRS.

Thankfully, someone I know very well is a CPA (who, despite being a CPA, wasn't an expert with internet gambling and the tax code) - and she recommended I report every penny I made, regardless of where the money was currently located. I'm not lawyer, nor am I an accountant, though...and I wouldn't take any advice you get on 2+2 as golden, given that most situations are unique.

My advice: if this is something that involves you personally, get yourself an accountant and talk it over.

[SheetWise]

Since the govenment considers online poker an illegal activity, you may not want to dislose the source or subledgers of your earnings. Maybe 2+2 has some drug dealers or prostitutes who can shed some light on the issue. How do they declare their earnings?

[vulturesrow]

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Since the govenment considers online poker an illegal activity, you may not want to dislose the source or subledgers of your earnings. Maybe 2+2 has some drug dealers or prostitutes who can shed some light on the issue. How do they declare their earnings?

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The government doesnt care actually. Specifically I mean the IRS. At any rate, I would think all you have to do is report as generic winnings from gambling, no need to mention online.

[DVaut1]

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Since the govenment considers online poker an illegal activity,

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Internet poker isn’t ‘illegal.’ The Justice Department claims online poker is in violation of the 1964 Wire Act (which prohibits betting on sporting competitions across state lines using any kinds of telecommunications wiring – phone, fax, internet, or otherwise). However, in 2001 the Supreme Court ruled that the Wire Act doesn’t apply to online casinos (and therefore online poker sites) because gambling games/poker aren’t ‘sporting’ competitions. The Justice Department continues to hold that online poker is ‘’illegal’’, but since the Supreme Court ruled against them, the JD doesn’t bother even attempting to try to prosecute anyone for it, as they’d surely not get a conviction and just waste a bunch of time/money. I'll defer to others if they have more updated/accurate information.

What I am fairly certain of, though, is that the IRS is interested in getting all income reported and taxed - and goodness knows they won't hesistate to audit/penalize/charge.

However, this certainly isn't legal advice, and should be considered as nothing more than an FYI - if the OP (or anyone else) gets hauled away to jail for playing poker online, then so be it. I'm no expert. But again, I reported my online poker winnings last year, and certainly have not been charged with any crime - and I sleep easier for it.

[bobman0330]

The following is not legal advice. Consult a professional.

In the US at least, poker winnings are income as soon as you win them (based on the theory that you could convert them into cash and spend them whenever you want to). You can deduct gambling losses in a given year from gambling winnings, but not from any other kind of income, and losses do not carry forward or back.

[SheetWise]

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However, in 2001 the Supreme Court ruled that the Wire Act doesn’t apply to online casinos (and therefore online poker sites) because gambling games/poker aren’t ‘sporting’ competitions.

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I'm looking for the decision -- do you remember the name?

[Ed Miller]

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Since the govenment considers online poker an illegal activity, you may not want to dislose the source or subledgers of your earnings. Maybe 2+2 has some drug dealers or prostitutes who can shed some light on the issue. How do they declare their earnings?

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Check out section 6103 of the Internal Revenue Code.