So who is filing as a pro for their 2006 taxes?
 

It has become more and more clear what the federal govt's view of online poker is throughout this process.

Not sure what tax implications are going to be--esp for those who expect to play on in worse games next year.

Is outing yourself by reporting and paying the right move if it will establish your profile with IRS and next year you mysteriously have no income and no other job? Figure your taxes and dont report but set the moeny aside and dont touch it?

I've heard all the IRS doesn't care what your income is from as long as you report it but I don't really buy it...any thoughts?

Re: So who is filing as a pro for their 2006 taxes?
 

I wouldn't worry about it. The legislation targets the institutions that fund online poker, not poker players themselves.

Re: So who is filing as a pro for their 2006 taxes?
 

I'm filing as an online-pro for 2006.

And will be doing the same for 2007.

The IRS cannot use tax-records to implicate you.

It contradicts your 5th amendment right against self-incrimination.
You HAVE to pay taxes on your income.
So they can't use that report against you.

That's what it pretty much boils down to.


Technically, drug-dealers and prostitutes and professional hitmen can pay their taxes on their income and that evidence cannot be used against them.


Al Capone didn't get nailed for killing anybody.
He got nailed for failing to pay the taxes for his mob-business.

Re: So who is filing as a pro for their 2006 taxes?
 

No, the federal government will not prosecute you for playing online poker, but they will gladly [censored] you for not paying your taxes.

Re: So who is filing as a pro for their 2006 taxes?
 

Pay taxes now? Hahahahahahahahaahahahahhaahahhh.

Re: So who is filing as a pro for their 2006 taxes?
 

[ QUOTE ]
Pay taxes now? Hahahahahahahahaahahahahhaahahhh.

[/ QUOTE ]

Frist is going to retire and his pension needs to be funded somehow.

Re: So who is filing as a pro for their 2006 taxes?
 

[ QUOTE ]
Pay taxes now? Hahahahahahahahaahahahahhaahahhh.

[/ QUOTE ]

Re: So who is filing as a pro for their 2006 taxes?
 

I don't know anything about your tax system... but I doubt a hitman can pay taxes and write down he got it by killing people. Can you explain that a little more? In most countries in Europe if you got money, they come and ask you where did you get it? And if they find out the money is from criminal activities, you are screwed. They take all money not just the taxes. I really doubt that in USA is any different.

(Of course I know that playing poker is not problematic, but the point of my post is a something else.)

Re: So who is filing as a pro for their 2006 taxes?
 

[ QUOTE ]
I don't know anything about your tax system... but I doubt a hitman can pay taxes and write down he got it by killing people. Can you explain that a little more? In most countries in Europe if you got money, they come and ask you where did you get it? And if they find out the money is from criminal activities, you are screwed. They take all money not just the taxes. I really doubt that in USA is any different.

(Of course I know that playing poker is not problematic, but the point of my post is a something else.)

[/ QUOTE ]

Actually it works pretty much exactly like that. Heck, in many states you are 'required' to get tax stamps for your drugs if you are a drug dealer.

You don't get arrested for what you put down when you file your taxes, however, NOT paying taxing on illegally gained money is a popular way to prosecute criminals when there isn't enough evidence to put them away on their crimes.

Re: So who is filing as a pro for their 2006 taxes?
 

Although poker is not my sole source of income, I filed a Schedule C for my poker income for 2005, and I anticipate doing the same for 2006, as my poker income is already higher than it was for 2005. Declaring your poker income is legal, whereas failure to do so is illegal. You need to consult with an accountant to determine if it makes more sense to file as a pro vs. declaring your winnings as income from a hobby. But in either case, the income needs to be declared if it exceeds some small threshold, which I believe is $600.

Re: So who is filing as a pro for their 2006 taxes?
 

Wait, I'm 18, and I don't even have a work permit. I've gone from 175 to around 4K right now. If I cash this all out, do I need to pay taxes on this? What happens if I don't?

Re: So who is filing as a pro for their 2006 taxes?
 

Hey! How about claiming unemployment now that the govt has shut down an online pro's career?

Re: So who is filing as a pro for their 2006 taxes?
 

[ QUOTE ]
Wait, I'm 18, and I don't even have a work permit. I've gone from 175 to around 4K right now. If I cash this all out, do I need to pay taxes on this? What happens if I don't?

[/ QUOTE ]

you have to pay taxes on any money you make. if you dont, well, im sure you heard stories about people not paying taxes. assess your risk tolerance and make a choice

Re: So who is filing as a pro for their 2006 taxes?
 

Alright, how the hell do you pay taxes? I want to do it without my parents finding out.

Re: So who is filing as a pro for their 2006 taxes?
 

[ QUOTE ]
Alright, how the hell do you pay taxes? I want to do it without my parents finding out.

[/ QUOTE ]

lol

Re: So who is filing as a pro for their 2006 taxes?
 

[ QUOTE ]
[ QUOTE ]
Alright, how the hell do you pay taxes? I want to do it without my parents finding out.

[/ QUOTE ]

lol

[/ QUOTE ]

Re: So who is filing as a pro for their 2006 taxes?
 

[ QUOTE ]
Wait, I'm 18, and I don't even have a work permit. I've gone from 175 to around 4K right now. If I cash this all out, do I need to pay taxes on this? What happens if I don't?

[/ QUOTE ]

You don't need a work permit when your 18..

Re: So who is filing as a pro for their 2006 taxes?
 

[ QUOTE ]
Alright, how the hell do you pay taxes? I want to do it without my parents finding out.

[/ QUOTE ]

From http://www.bash.org/?3936

<+kritical> christin: you need to learn how to figure out stuff yourself..
<+Christin1> how do i do that

Go to a local library, pick up taxes brochure. Otherwise, www.irs.gov is your friend. Also, there's certain threshold under which you don't even have to declare, let alone pay taxes. You might want to consider losing enough by the end of the year to get under that threshold [img]/images/graemlins/smile.gif[/img]

Oh, FYI taxes are paid on the money won during the year, not on money withdrawn.

Re: So who is filing as a pro for their 2006 taxes?
 

What's the difference between money won and money withdrawn? Wouldn't the money withdrawn - money first deposited = money won.

Re: So who is filing as a pro for their 2006 taxes?
 

I have to agree with the first post. The government does not have the means to investigate every financial transaction. That would be impossible. They can only make a blanket statement to scare united states banking corporations.

I never knew that you could file any of your income as poker winnings. I figured those would be confiscated. I have never had more than a four figure income from poker, however, so that means I would go unnoticed.

In washington, where I play from, it's a class C felony to play online poker. Number of arrests made for online gambling in washington? zero. The police don't have financial transaction records or mac address records. Those are privately held.

Re: So who is filing as a pro for their 2006 taxes?
 

I've paid taxes on my past 2 years of poker income. I'm not going to this year. I am not motivated by greed, but I just can't allow myself to pay a part of Frist's salary out of my poker winnings. I expect to make ~50k in real-wolrd type work, so hopefully it won't be suspicious enough that I get audited. If I do, it's off to Costa Rica. FU america.

Re: So who is filing as a pro for their 2006 taxes?
 

You deposit 20000 in 2005, you are down to 10000 by 1/1/2006, you are up to 40000 in 2006, you withdraw it. You have to pay taxes on 30K, not 20K in 2006.

Re: So who is filing as a pro for their 2006 taxes?
 

be careful about filing as a pro if you havent already in the past.

If in your tax situation there isnt a lot of difference, I wouldnt file as a pro. Why?

Because that might be the only thing that makes your playing online illegal. It may allow the govt to classify you as "a person in the business of betting or wagering"...ie if its you are a pro, its your business, and then betting..not just transferring..is illegal.

Re: So who is filing as a pro for their 2006 taxes?
 

[censored] em...i aint givin these [censored] a god dam dime.

At least they don't regulate card games in prison.

Indy

Re: So who is filing as a pro for their 2006 taxes?
 

My taxes are filed with poker winnings on a schedule C. My CPA described my business as a "professional gambler". There is nothing anywhere on my return that could be used to determine whether this money came from online poker, trips to AC and Foxwoods, or scratch off lottery tickets for that matter.

Re: So who is filing as a pro for their 2006 taxes?
 

Question and Thoughts

Question: I did not claim poker income on the last few years on my taxes. I have cashed in 3 events this year, including a 57K cash at the WSOP. I was W2'd for that and an event at Caeser's earlier in the year. You can now view my other cashes online under my player profile. Should I claim this as well even though they were not W2'd? Also, is it more likely that this would be caught and audited if I claim the other cashes? Should I claim my online winnings now too for fear that that is also more likely to be noticed? Unfortunately, I have taken a lot of $8500, $9500, $7800, etc witdraws online recently because of the power hungry, Evangelistic, wanting to control our morals, US Gov't bill recently passed. This would definitely show up on my bank records. I make pretty good money outside of poker, so the deposits are not unusual for my income.

Thoughts:

All major pro's claim their earnings and some of that is online money. Do you ever hear of them getting in trouble by the US Gov't? You have no worries about claiming online winnings and getting in trouble for playing online by the Gov't.

Re: So who is filing as a pro for their 2006 taxes?
 

[ QUOTE ]
My taxes are filed with poker winnings on a schedule C. My CPA described my business as a "professional gambler". There is nothing anywhere on my return that could be used to determine whether this money came from online poker, trips to AC and Foxwoods, or scratch off lottery tickets for that matter.

[/ QUOTE ]

and when some overzealous agent decides he wants to see your session reports and finds out that your are in the business of betting or wagering online?

Re: So who is filing as a pro for their 2006 taxes?
 

[ QUOTE ]
and when some overzealous agent decides he wants to see your session reports and finds out that your are in the business of betting or wagering online?

[/ QUOTE ]

Then he gets to see them. The point is, I have to report the income, and there is nothing on my return flagging it as illegal. I would argue that it is not illegal income in any case, as the laws all point to those in the business of accepting bets and wagers, not those placing them.

Re: So who is filing as a pro for their 2006 taxes?
 

the really sweet thing is the for thsoe of us fortunate enough to live in the handful of states where it is not legal to deduct losses.

this clause basically prohibits anyone from filing straight up as filing = paying more in tax than you made in profit.

if you live in one of these staes and do your federal stuff right and file as a pro then you just have to send it in the same way to the state and hope they decide not to rape you at some future point as your expenses/losses on your Schedule C are actually losses--which you are not allowed to deduct.

Re: So who is filing as a pro for their 2006 taxes?
 

[ QUOTE ]
Al Capone didn't get nailed for killing anybody.
He got nailed for failing to pay the taxes for his mob-business.

[/ QUOTE ]

I think that at the time that Al Capone got nailed, you could be implicated by your tax returns... not 100% sure though.

Re: So who is filing as a pro for their 2006 taxes?
 

[ QUOTE ]
I don't know anything about your tax system... but I doubt a hitman can pay taxes and write down he got it by killing people. Can you explain that a little more? In most countries in Europe if you got money, they come and ask you where did you get it? And if they find out the money is from criminal activities, you are screwed. They take all money not just the taxes. I really doubt that in USA is any different.

(Of course I know that playing poker is not problematic, but the point of my post is a something else.)

[/ QUOTE ]

I'll try to explain how I THINK the logic works.
I believe I am getting most of this correct even though I don't know all the details. If anyone wishes to correct or expand or clarify then please feel free.
Otherwise, I think we can assume that most of this is at least relatively close to correct for purposes of this discussion:

My understanding of how it works and how it probably came about:

The original constitution in the 5th amendment includes the right against self-incrimination.
You have the right to NOT incriminate yourself of a crime.


I guess it was later that the U.S. implemented the income-tax.
You HAVE to declare tax on your income.
You have no choice in this regardless of what that income-source may be.


okay, so somebody says, "No way. I want to involke my 5th amendment right against self-incrimination. Paying my taxes may incriminate me of something. Therefore, I have every right to not pay my taxes because it says so right there in the 5th amendment."


in order to FORCE people to pay their taxes on their income and not be able to get out of it by claiming that doing so could incriminate themselves, they had to enact language that nothing in the tax forms could be used for incrimination of any of the activities discovered therein.


Thus, you really CAN and HAVE TO pay taxes on income that is even an illegal activity.
Obviously if you are a professional hitman you would probably be wise to come up with some sort of creative way of describing your job. Because I just wouldn't trust the govt to see, "Professional Killer" and not go with that info and not go out and try to catch you in the act.


But with 'professional gambler' they just can't use it against you because it violates your constitutional rights.
Also note that it would be unrealistic to come after 20-million American internet-gamblers anyway but that's besides the point.


Yes, if your income source is from something illegal you really do have to pay taxes on it. And theoretically, if you listed your occupation as drug-dealer they could not use it against you.

Re: So who is filing as a pro for their 2006 taxes?
 

[ QUOTE ]
[ QUOTE ]
Pay taxes now? Hahahahahahahahaahahahahhaahahhh.

[/ QUOTE ]

Frist is going to retire and his pension needs to be funded somehow.

[/ QUOTE ]

This made me really really angry, probably more than anything else thats happened recently. God damn it.

Re: So who is filing as a pro for their 2006 taxes?
 

[ QUOTE ]
Yes, if your income source is from something illegal you really do have to pay taxes on it. And theoretically, if you listed your occupation as drug-dealer they could not use it against you.

[/ QUOTE ]

I remember reading things like this many times in the help files that came with Turbo Tax back when I used to use it. I've been trying to verify it, but I only found counter examples:

http://en.wikipedia.org/wiki/Fifth_A...s_Constitution

<font color="green">In some cases, individuals may be legally required to file reports that call for information that may be used against them in criminal cases. In United States v. Sullivan, 274 U.S. 259 (1927), a case involving the Federal income tax, the United States Supreme Court ruled that a taxpayer could not use the Fifth Amendment to refuse to file a required income tax return. The Court stated: "If the form of return provided called for answers that the defendant was privileged from making[,] he could have raised the objection in the return, but could not on that account refuse to make any return at all. We are not called on to decide what, if anything, he might have withheld."

In Garner v. United States, 424 U.S. 648 (1976) the defendant was convicted in connection with a conspiracy to "fix” sporting contests and to transmit illegal bets. During the trial the prosecutor introduced, as evidence, the taxpayer's Federal income tax returns for various years. In one return the taxpayer had showed his occupation to be “professional gambler.” In various returns the taxpayer had reported income from “gambling” or “wagering.” The prosecution used this to help contradict the taxpayer's argument that his involvement was innocent. The taxpayer tried unsuccessfully to keep the prosecutor from introducing the tax returns as evidence, arguing that since the taxpayer was legally required to report the illegal income on the returns, he was being compelled to be a witness against himself. The Supreme Court agreed that he was legally required to report the illegal income on the returns, but ruled that the privilege against self-incrimination still did not apply. The Court stated that "if a witness under compulsion to testify makes disclosures instead of claiming the privilege, the Government has not 'compelled' him to incriminate himself."

Sullivan and Garner are viewed by some legal scholars as standing, in tandem, for the proposition that on a required Federal income tax return a taxpayer would probably have to report the amount of the illegal income, but might validly claim the privilege by labeling the item "Fifth Amendment" (instead of "illegal gambling income," "illegal drug sales," etc.)"</font>

That said, it would be hard to hide the source of online poker income because of electronic transaction records, so "taking the fifth" as to the source of gambling income in this case seems useless.

The question is, whether before or after this new law is enacted, am I breaking any laws by playing online poker in a business-like manner as a skilled player with an expectation of winning? I still think not, at least in my state. The New York laws all seem to exclude those "acting as a player" when defining a person profiting from or advancing gambling activity.

<font color="green">
4. "Advance gambling activity" A person "advances gambling activity" when, acting other than as a player, he engages in conduct which materially aids any form of gambling activity. [etc]

5. "Profit from gambling activity." A person "profits from gambling activity" when, other than as a player, he accepts or receives money or other property pursuant to an agreement or understanding with any person whereby he participates or is to participate in the proceeds of gambling activity.
</font>

http://www.gambling-law-us.com/State-Laws/New-York/

Re: So who is filing as a pro for their 2006 taxes?
 

Nice post TimM

Solid research--thanks a lot!

Re: So who is filing as a pro for their 2006 taxes?
 

Be sure to also report the fair market value of any items you stole.

Re: So who is filing as a pro for their 2006 taxes?
 

[ QUOTE ]
Be sure to also report the fair market value of any items you stole.

[/ QUOTE ]

????

Re: So who is filing as a pro for their 2006 taxes?
 

[ QUOTE ]
Question and Thoughts

Question: I did not claim poker income on the last few years on my taxes. I have cashed in 3 events this year, including a 57K cash at the WSOP. I was W2'd for that and an event at Caeser's earlier in the year. You can now view my other cashes online under my player profile. Should I claim this as well even though they were not W2'd? Also, is it more likely that this would be caught and audited if I claim the other cashes? Should I claim my online winnings now too for fear that that is also more likely to be noticed? Unfortunately, I have taken a lot of $8500, $9500, $7800, etc witdraws online recently because of the power hungry, Evangelistic, wanting to control our morals, US Gov't bill recently passed. This would definitely show up on my bank records. I make pretty good money outside of poker, so the deposits are not unusual for my income.

Thoughts:

All major pro's claim their earnings and some of that is online money. Do you ever hear of them getting in trouble by the US Gov't? You have no worries about claiming online winnings and getting in trouble for playing online by the Gov't.

[/ QUOTE ]

MANY pros after claiming 2-3 years as a pro gambler get audited. I believe Greenstein talked about this in his book.

Re: So who is filing as a pro for their 2006 taxes?
 

[img]/images/graemlins/grin.gif[/img] As Americans, it is our duty to pay taxes after the mess we poker players created. Our taxes go to stop the war against terrorism. If it wasn't for Mr. Frist, I would not have known that part of our rake goes to AL QaEDA. After all, where do you think Osama's been all these years. He's not only taking the rake, he's a badass owner/player like Teddy KGB, with a TAG game. That's right, he's been 12 tabling in that cave with that wicked broadband connection.

And just in time too, b/c a few more cents from the .01/.02 NL game on Prima (or any other site) and they could have bought another nuclear missle.

Thank you Mr. Frist. The world is a safer place now that you've stopped gambling forever.