Paying taxes on neteller inflows to your bank account only

[BGnight]

I also overheard some other recreational online poker players last night talking about they only pay taxes on neteller deposits into their bank accounts. This to me seems relatively safe as there is no way for the IRS to know where this money is coming from. I'd like to hear any legitamite arguements to this.

[dmk]

umm, here's a simple one. when you get audited, you're going to be convincted for tax-evasion

[BGnight]

Lol. I knew I'd get this response.

[Wongboy]

[ QUOTE ]
I also overheard some other recreational online poker players last night talking about they only pay taxes on neteller deposits into their bank accounts. This to me seems relatively safe as there is no way for the IRS to know where this money is coming from. I'd like to hear any legitamite arguements to this.

[/ QUOTE ]

I think this might work and is definately better than not reporting at all. If you report net gambling winnings as "other income" and this ties into your Neteller transfers, then you may be able to be vague on the income source. For example, you may be able to claim that the money came from some ambiguous illegal activity, or from the former president of Nigeria.

Personally, I describe my gains and losses as gambling activities and also ensure that I have detailed spreadsheets that match the gross and net amounts reported on my tax return as back-up in case I ever get audited, but that is based on my own risk/reward determination. BTW, I doubt that the IRS could subpoena records from the poker sites, so I do not believe that your spreadsheet needs to match exactly with the records from various sites. Again, this is a risk/reward determination that you will need to make for yourself.

[ginko]

THe problem is, if you get audied, you must prove where the money came from. Now if you show them all of your hand histories(you have those right?), they will add it up and realize that you made a certain amount, and cashed out a certain amount, and those numbers dont match.

[damaniac]

Not to give advice on how to break the law, but it seems as though one could simply purge some sessions to get it to match up, no?

[cokehead]

what exactly is the problem if the IRS figures out this income is from online poker?

[tboss888]

How much more do you pay on your taxes if you report your wins and losses separately? anybody know? If your net amount is $0, then you could still be liable for a nice chunk of money to the IRS?

[Niediam]

The major difference for most people is that you cannot take the standard deduction.