Paying taxes on Poker Winnings...

[Ed Miller]

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OH, and I forgot to say that by the Federal Gov't's collecting of the taxes on
said income source, aren't they acknowledging its legitimacy by virtue of this fact alone?

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That's not how they see it.

[LImitPlayer]

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I don't know about Britain, but Canada does not tax Poker or Blackjack winnings. You have been corrected

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You are incorrect. I live in Canada. I am an online proffesional poker player. My sole source of income is from poker.

I have to pay taxes on my poker winnings. I went to 2 different accountants and they both said the same thing.

My income from poker is substantial, do you think I would pay taxes just for the hell of it?

You have been corrected

[Peter666]

Fortunately your accountants are not the CRA (Canada Revenue Agency). They have deemed all gambling winnings as non taxable. The "profession" of poker lies in a grey area between hobby and regular income generating activity. Because online poker itself is illegal in Canada, you should not be paying taxes. I doubt drug dealers do.

A Canadian here in a family court case had to inquire about this to the CRA, and they gave him the all clear. His sole income is poker as well.

The McGuinty government in Ontario considered taxing gambling winnings last year but did not because the casinos (which are owned and run by the government) were deemed to be income producers in and of themselves. If it was all privatized, we would probably be paying taxes on our poker income right now.

It is specifically written in the Canadian tax code that a professional BlackJack player is tax exempt. (I believe this was an issue in the early 80's).

You have absolutely no reason to pay income tax. Even if this is considered your "profession" you are in the clear. I have met many accountants in my line of work and am not surprised that they gave you bad advice. If possible, try to do your taxes on your own. Ask the CRA directly if you have questions.

[wheelz]

no, you are wrong. if it's your main source of income, yes you do have to pay taxes on your gambling winnings in canada, i assure you.

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Because online poker itself is illegal in Canada, you should not be paying taxes. I doubt drug dealers do.

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sadly enough, yes they do. drug dealers, prostitutes, or anyone else dealing with illegal income actually has to properly file their taxes. they can deduct "business expenses" too. handcuffs, whips, scales, whatever. the government wants your money, they don't care so much about how you got it.

[Peter666]

I realize that any "professional" activity which YOU define as your source of income is subject to tax. But it is the CRA which makes the final decision as to whether you must pay it or not. As already stated, the CRA has made decisions in this regard. If you have any particular question, you can clear it up with them.

Even if the CRA deemed that we had to pay tax on online poker winnings, this is something that could be challenged in court or negotiated on. BlackJack already has been written into the Tax code itself as not being subject to taxation at the "professional" level.

[Mig]

Online poker is illegal in Canada really ? Will they ever pursue someone playing online poker or ?

By the way a "professionnal" gambler HAS to pay taxes but the grey part is how they define a "professional" gambler.


Gambling Profits

10. Profits derived from bookmaking or from the operation of any gambling establishment (carried on legally or otherwise) constitute income from a business. In addition, an individual may be subject to tax on income derived from gambling itself, if the gambling activities constitute carrying on the business of gambling; see the decision of MNR v. Morden, (1961) CTC 484, 61 DTC 1266 (Ex. Ct.). The issue of whether or not an individual's activities are such that he or she can be considered to be carrying on a gambling business is a question of fact that can be determined only by an examination of all of the circumstances and the taxpayer's entire course of conduct. Although no one factor may be conclusive, the following criteria should be considered in making the determination:

(a) the degree of organization that is present in the pursuit of this activity by the taxpayer,

(b) the existence of special knowledge or inside information that enables the taxpayer to reduce the element of chance,

(c) the taxpayer's intention to gamble for pleasure as compared with any intention to gamble for profit as a means of gaining a livelihood, and

(d) the extent of the taxpayer's gambling activities, including the number and frequency of bets.

It is clear from various decisions of the courts that earnings from illegal operations or illicit businesses, such as illegal gambling and fraudulent business schemes, are not exempt from tax. (See for example, the decisions in The Queen v. Poynton, (1972) CTC 411, 72 DTC 6329 (Ont. C.A.) and MNR v. Eldridge, (1964) CTC 545, 64 DTC 5338 (Ex. Ct.).) Hobbies



There was a great thread not long ago
http://forumserver.twoplustwo.com/showfl...rt=all&vc=1

I haven't consulted any accountants but I called 2 times the CRA and talked to 2 differents person over there and they said it's considered as a windfall...

[LImitPlayer]

Both of the accountants I went to were unsure of the issue and both of them had to contact the CRA to clarify things.

One of them did it the next day, the other picked up the phone and called right then and there while I was in the office with them.

As far as the CRA is concerned if I am expecting an income and receiving income from my poker playing and it is my sole source of income then yes it is taxable.

As far as your comment regarding drug dealers not paying taxes because it is an illegal activity so they don't have to pay taxes, it doesn't even compare.

What did they finally arrest Al capone for? Tax evasion. Was he legit, I think not

This nonsense about not having to pay taxes on poker in Canada is nonsense and it needs to stop because there is some really bad advice out there.

[pzhon]

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That last line is what I don't get...how can one pay taxes on illegal income?
This statement is illogical.


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IRS: "Illegal income, such as stolen or embezzled money, must be included in your gross income."
It's not illogical. Illegal does not mean the laws ignores it.

This is not to say poker winnings are illegal. It is very different to run an unlicensed casino than to gamble in one.

[Peter666]

The individual provinces make up the gambling laws. In Ontario, every casino must be run under the auspices of the Ontario Gaming and Lottery Association. Of course, foreign internet casinos are not. Technically, players should not be gambling in a casino not controlled by the province while physically present in Ontario. That's what makes it illegal. Of course this law cannot be enforced and even if the government tried draconian measures to stop it, they could not seize any money because it is held in foreign countries. So there is no profit or advantage in pursuing it.

Thanks for confirming the windfall situation for Canadian poker players. We have so much stupid bureaucracy that sometimes we can find loopholes that work to our advantage. I can literally go to Casino Windsor five days a week 8 hours a day and not be considered a "professional" because the casino is run by the government for profit. Online gambling is a stickier situation but luckily the CRA has decided in our favour on this one.

[Peter666]

Which province do you live in? This might effect the policy.

Luckily the CRA is not the IRS. On which income did they find Al Capone guilty of tax evasion, the illegal or legal ones?