Question on Canada and taxes

[thegowzer]

Ok so i know if you're playing in the states, legally you should be declaring your winnings and pay taxes.

What about in canada?

[monkeyman]

if you are playing poker professionally and it is your main source of income, you need to pay tax. if not, you don't.

[blueodum]

It doesn't even need to be your main source of income. If you are playing in a systematic way, the goal of which is to earn money, it's taxable.

[thegowzer]

what if its for recreation? Seems like a gray area.

[ianlippert]

probably the best canadian tax thread

Canadian tax thread (http://forumserver.twoplustwo.com/showflat.php?Cat=0&Number=1095183&page=0&fpart=1&v c=1)

[blueodum]

If you truly are a recreational player (and you have to prove that you are if you are audited and decide to appeal in court), you don't have to declare poker winnings.

[Peter666]

Has any Canadian ever been taken to tax court over poker winnings?

[sammyG]

As far as I know in my experience, gambler's earnings in Canada are generally left alone as long as they can show some earnings from another source of income that can be legitimately claimed as a job. Canada is definetly the place to be at a time like this.

[blueodum]

Has any Canadian ever been taken to tax court over poker winnings?

So far they've been left alone. But if you make your living playing poker in Canada and you aren't declaring the income, you are breaking the law.

[AAxxCracker]

[ QUOTE ]
Has any Canadian ever been taken to tax court over poker winnings?

So far they've been left alone. But if you make your living playing poker in Canada and you aren't declaring the income, you are breaking the law.

[/ QUOTE ]

Do you think that someone making a basic living on $25,000 a year playing poker could be the first one made an example of in tax court when there are undoubtedly pros and semi-pros with a job and pensioners and some university students making a lot more regularly? I would think they'd go for a big fish first and then a few hundred would rush to tax amnesty (aka voluntary disclosure) to pay back-taxes and interest but without penalties or prosecution.

[csi]

I hired a tax lawyer 4 years ago to research this for me. It cost me 1500.00
Basically, he said there was no case law where revenue canada had gone after a poker player. And that Poker winnings do not fall under the criteria for "taxable income".

However, he did say that there is no guarantee that Revenue Canada wouldn't try and tax you if you were making a pile of money playing poker. In that event, then you would require a tax lawyer to fight them in Court.

[smashoneout]

Still a better deal than Australia. If you're a pro player, the motherland gets half.

[AAxxCracker]

Did your lawyer give you even a vague idea where the level of "a pile of money playing poker" starts? A pile is very vague. But thanks for your input on the subject.

I also wonder if writing down the occupation as "Poker Player" on a passport renewal form would raise flags if Passport Canada shares information with the Canada Revenue Agency and the person is not paying taxes on this income.

[blueodum]

That's probably what will happen - there will be a few high-profile cases some years down the road.

Still, fear of prosecution is not the only reason to obey the law - is it?

[blueodum]

I hired a tax lawyer 4 years ago to research this for me. It cost me 1500.00
Basically, he said there was no case law where revenue canada had gone after a poker player. And that Poker winnings do not fall under the criteria for "taxable income".


I think you got some bad advice. There is a section that does talk about gambling income; specifically when it is exempt and when it is taxable. And there have been Canada Revenue v sportbettors cases heard. How exactly does a poker player differ from a sportsbettor as far as the Candian tax code is concerned?

I asked my brother-in-law, who used to work for Revenue Canada and he confirmed that my understanding of the situation (see above)was correct.

[pocketjesuits]

So, suppose one were to not declare their poker income, and Revenue Canada were to come after them - what's the worst that could happen?

[homeboy604]

^^^they would probably determine how much tax you owe, then penalize you for not paying your taxes, plus interest.
probably double of what you owe them.

[DavidNB]

[ QUOTE ]
I hired a tax lawyer 4 years ago to research this for me. It cost me 1500.00
Basically, he said there was no case law where revenue canada had gone after a poker player. And that Poker winnings do not fall under the criteria for "taxable income".


I think you got some bad advice. There is a section that does talk about gambling income; specifically when it is exempt and when it is taxable. And there have been Canada Revenue v sportbettors cases heard. How exactly does a poker player differ from a sportsbettor as far as the Candian tax code is concerned?

I asked my brother-in-law, who used to work for Revenue Canada and he confirmed that my understanding of the situation (see above)was correct.

[/ QUOTE ]

http://www.cra-arc.gc.ca/E/pub/tp/it334r2/it334r2-e.html

[SlightlyMad]

I've read all of the thread (and previous threads) ... and I've had my accountant read the appropriate bits of tax law as well.

In my case, employment income >> poker income and hours spent on employment income >> hours spent on poker. (Yes, I've read the snooker example from the other thread.) He felt comfortable in recommending to me when poker income >= employment income, claim poker as a business. Even if I luckbox my way into a WSOP ME win, pay the taxes. Until then, it is a hobby.

[BruceDoh]

[ QUOTE ]
^^^they would probably determine how much tax you owe, then penalize you for not paying your taxes, plus interest.
probably double of what you owe them.

[/ QUOTE ]

So it's still +EV as long as there is less than 50% of them catching on.

[TorontoCFE]

You would at minimum have to pay taxes owing plus interest.
Likely they would add ona penalty of 100% of the taxes.

If it was determined that this was attempted tax evasion and not simply an error or honest mistake of law, then you may face probation.

You wouldn't go to jail over it unless you were a repeat offender.

[TorontoCFE]

Not yet but they are looking into a few cases.

[TorontoCFE]

You don't have to celare an occupation on Canadian passports.

Branches share info but not rountinely.

TECHNICALLY, the $ amount is irrelevant. The issue would be whether it was worth them dedicating the resources to come after you. Given an investigation could cost 30k, the analysis means you need to be making over 100k a year and not declaring to have much risk of being hauled to court.
But that doesn't mean it is legal to not declare. You are either in the business of poker or not.