The Tax Man Cometh

[TheMetetron]

Also from the IRS website:

[ QUOTE ]
Trade or business. A trade or business is generally an activity carried on for a livelihood or in good faith to make a profit. The facts and circumstances of each case determine whether or not an activity is a trade or business. The regularity of activities and transactions and the production of income are important elements. You do not need to actually make a profit to be in a trade or business as long as you have a profit motive. You do need, however, to make ongoing efforts to further the interests of your business.

[/ QUOTE ]

irs laughs at me and says "hobby loss"

[WichitaDM]

How much does a CPA cost? I appreciate all the info.

[SinCityGuy]

[ QUOTE ]
If it's your primary source of income, you are self-employed. Period. Especially if you have been doing it for years.

Not filing as such is attempting to avoid paying the SE tax. This is not going to end good when you do get audited one year. All that interest is going to add up.

[/ QUOTE ]

There is no requirement for fulltime players to file under Schedule C. If they're only making about 50K per year or less, they're usually better off filing a normal return and listing their losses as an itemized deduction. They don't have to pay SE tax if they do this. On the line for employment, they can list "none" or "retired" if they want to.

If they're making over 50K per year, in most cases they're better off filing under Schedule C and paying the SE tax because of the additional business related deductions that are allowed on Schedule C.

[TheMetetron]

It's better for me not to file Schedule C. Still, I have to and that's why I do.

You pretty much are required to if you do this for a living. Anyone here have a good financial advisor tell them otherwise? I'd be interested if they did, because I'm yet to find one.

[Niediam]

The first thing you need to do is atleast use some common sense. Nobody is going to argue that its clear what a 'session' is but its obviously not a month or a year. Is it a day? Probably not but maybe the IRS won't bend you over if it appears you are trying to be cooperative.

But the important thing here really isn't what you or I think a session may be. It's what the IRS will think. If you get audited there is no way they are going to let your 'year session' theory work. They will find that you owe more taxes. They will find that you owe interest. They will penalize you. Now what do you do? Fight it? You can try but you have two problems. 1) You will have a hard time winning as it appears you didn't even try to comply with the law and 2) even if somehow you win your attorny fees will at a minimum be sevearl thousand dollars.

Here is a link to an article by Russ Fox (a CPA, poker player, and 2+2er) which may help with figuring out what a session is...

http://www.gambling-law-us.com/Artic...ng-Session.htm

[octop]

To file as a pro dont you have to have won in 3 of the last 5 years?
The problem regarding a session is its the IRS's (or atleast tax court) opinion that really matters.Even if they had defined a session in the past, the world of online poker would have changed that definition anyway.

[RikaKazak]

anyone else think this is just retarded? Can we please put together some sort of bill to change this, I don't see why it's not just net profit.

[Niediam]

[ QUOTE ]
To file as a pro dont you have to have won in 3 of the last 5 years?

[/ QUOTE ]

I have read similiar statements time and time again but never once has anybody cited an official souce...

Can any verify or deny this for a fact?

[Niediam]

Getting congress to pass a bill isn't exactly the easiest thing in the world. [img]/images/graemlins/smile.gif[/img]

I'd assume that part of the reason that the law is so anti-gamblers as it is considered a 'sin tax'.