taxes and online poker/IRS auditing

[king of the deck]

alright, to begin with, my 1040 from 2005 has a 0 on it (i had no taxable income), which obv raises IRS suspicion. my 1040 for 2006 has not yet been filed, and all my poker cashouts went directly to my bank acct via EFT. this was via click2pay. point of this post - basically im afraid of being audited at some point BECAUSE of the 2005 return of 0. so, because i didnt plan ahead and get all my cashouts via ATM card etc., im pretty much screwed if I DO get audited and the IRS wants bank statements, correct?

i started using PT/saving hand histories last year in march, but i also have my bank records to go by to determine how much tax i owe for 2005. that's looking like the smart play right now, again, due to the fact that I don't have a dayjob to use as a cover for 2006 or the previous year when I filed 0 income.

obv this opens a whole new can of worms regarding the legality online gaming, and whether or not I could be subject to state or federal prosecution, but im mostly worried about an audit and the IRS.

thoughts, anyone?

and oh yeah, I'm not talking about a LOT of money that I owe (under 10k), but I'm pretty sure that doesnt really matter to the IRS. i could be wrong, but ive always gotten the impression that tax evasion is tax evasion, except for those special multi-million high profile cases you hear about on the news.

sorry if this is in the wrong forum. all serious feedback is greatly appreciated.

[alphatmw]

how about you report income. crazy i know.

[king of the deck]

thanks for the reply, really helpful

[cowboy.up]

i'd make a best faith estimate of your 2005 income from your bank statements (i know this is essentially netting your wins/losses but it's better than nothing) and trying to reconcile and make nice with the IRS. it sounds like you have about 80% of 2006 covered as of accurate tracking goes so you're on your way to being a tax abiding citizen.

i wouldn't lose too much sleep over it, just make sure to get to the IRS before they get to you. they're willing to work things out with people that approach them with trying to reconcile their history. you may open a whole new can of worms in the event you get audited and have a tens of thousands of dollars of income from poker in 2005 (saying you owe "under 10k") that went unreported.

you can't see it enough in these forums: pay your taxes, sleep well at night.

[alphatmw]

[ QUOTE ]
thanks for the reply, really helpful

[/ QUOTE ]please disregard it and report back in the future.

[king of the deck]

[ QUOTE ]
i'd make a best faith estimate of your 2005 income from your bank statements (i know this is essentially netting your wins/losses but it's better than nothing) and trying to reconcile and make nice with the IRS. it sounds like you have about 80% of 2006 covered as of accurate tracking goes so you're on your way to being a tax abiding citizen.

i wouldn't lose too much sleep over it, just make sure to get to the IRS before they get to you. they're willing to work things out with people that approach them with trying to reconcile their history. you may open a whole new can of worms in the event you get audited and have a tens of thousands of dollars of income from poker in 2005 (saying you owe "under 10k") that went unreported.

you can't see it enough in these forums: pay your taxes, sleep well at night.

[/ QUOTE ]

good advice, appreciate the post

[Ray Zee]

go see a cpa right now. then file an amended return for 2005 and the proper 2006. you should be fine then.