nevadaJACK
11-27-2006, 06:57 AM
I am a Canadian on an F-1 visa in the USA.
I make more than a trivial amount in annual poker winnings.
I have read the US tax code VERY carefully, and I'm interpreting it to say that I do NOT owe taxes to the IRS on my winnings. I am sure there are dozens of others on these forums in my exact position and want to know what conclusion you've come to, and/or whether you've consulted with any professionals.
Here's the thing: the tax code makes very clear that nonresident aliens (what I file as) do NOT owe taxes to the IRS on income from foreign sources. Online poker sites are foreign sources. If it were that simple, then it's an open and shut case.
HOWEVER, there's a little twist:
The IRS publishes "sourcing guidelines" explaining just when income will be counsidered from a "foreign source." Only problem is that online gambling doesn't fit ANY of the categories: i) employment, ii) independent personal services, iii) royalties, iv) fellowship/scholarship.
I suppose that i) and ii) are closest-to-the-pin, but if that's the case, it appears that the source is determined by "where the service is performed." Well, where the hell is an online gambling service performed? Where the player is seated in front of his computer, or where the servers are located?
I approached the international student office at my college about this, and they're utterly clueless.
I'm sure other foreign students in the USA have contemplated this...what conclusions did you come to?
My position on this is that if I do owe taxes on my winnings, I want to pay them so as not to run afould of the IRS...but I sure as hell don't want to pay them if I don't legally owe them.
I make more than a trivial amount in annual poker winnings.
I have read the US tax code VERY carefully, and I'm interpreting it to say that I do NOT owe taxes to the IRS on my winnings. I am sure there are dozens of others on these forums in my exact position and want to know what conclusion you've come to, and/or whether you've consulted with any professionals.
Here's the thing: the tax code makes very clear that nonresident aliens (what I file as) do NOT owe taxes to the IRS on income from foreign sources. Online poker sites are foreign sources. If it were that simple, then it's an open and shut case.
HOWEVER, there's a little twist:
The IRS publishes "sourcing guidelines" explaining just when income will be counsidered from a "foreign source." Only problem is that online gambling doesn't fit ANY of the categories: i) employment, ii) independent personal services, iii) royalties, iv) fellowship/scholarship.
I suppose that i) and ii) are closest-to-the-pin, but if that's the case, it appears that the source is determined by "where the service is performed." Well, where the hell is an online gambling service performed? Where the player is seated in front of his computer, or where the servers are located?
I approached the international student office at my college about this, and they're utterly clueless.
I'm sure other foreign students in the USA have contemplated this...what conclusions did you come to?
My position on this is that if I do owe taxes on my winnings, I want to pay them so as not to run afould of the IRS...but I sure as hell don't want to pay them if I don't legally owe them.