This should end all of the false claims about paying US taxes on poker

[dtan05]

maybe they think netting is way cheaper than not doing so

[RoundGuy]

[ QUOTE ]
maybe they think netting is way cheaper than not doing so

[/ QUOTE ]
Yeah, and it would be even cheaper if they filed no tax return at all. Hmmm. Let's try that....

[bcubed72]

[ QUOTE ]
Take an online SNG player, who plays 30 $100 SNGs a day. He could have $100,000 in income and $80,000 in losses.

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This goes back to the issue of what constitutes a "session." The predominant view I've seen here is the most restrictive: each SNG=1 session, regardless of number played during one time at the computer, multitabling, or whatever.

Tis makes a certain amount of sense in a B+M casino; after all, you sit down at a table, play, then physically get off your arse and wait for the next one. This is NOT the case of internet player who's consistently playing >= 1 SNG for 5 hours straight.

To the best of my knowlege, this has yet to be challenged in court. I'd be willing to believe that a more liberal interpretation of a session might prevail.

Note that, to get in trouble for using this definition of a session, the IRS would have to:
1. Take exception to your figures
2. Audit you
3. Challenge whatever piece of paper you show them
4. Obtain contrary information
5. Take you to court
6. Win

I plan on counting continuous time spent logged on to a website as a "session." I seriously doubt any repurcussions.

Note that the law technically requires a losing player (who may never have even cashed out) to declare winnings. Do you think 1 in 500 do so?

[Mondogarage]

[ QUOTE ]
P.S. Stop throwing around prison. No one goes to prison for reporting their income incorrectly. Truthfully, few go to prison even in blatant cases of fraud. The IRS just wants, and tends to get, its money. Contact a tax professional. They live in the real world.

[/ QUOTE ]

That defense didn't work so well for Al Capone.

[Russ Fox]

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I again ask what if you multitable and count each table as a session and count breaks. Does that mean reporting 200 sessions a day? What if I have a full time job but play lots of onine poker and end up with $1,000,000 in wins and $999,000 in loses?

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Well, I've written an article about what a session is. Although you won't like my conclusions, a tournament is a session. For those who play lots of SNGs, they have lots of sessions. That's the law.

If you want to evade the Tax Code, and the regulations promulgated thereunder, that's your issue. I am a professional tax preparer, and if you think I'm going to advise anyone to evade the law, you're nuts.

Indeed, a SNG player could have your theoretical $1 MM in wins and $999k in losses. I've seen (and prepared) some strange looking returns for people impacted by the Alternative Minimum Tax (AMT). The Tax Court has repeatedly ruled (as have the Courts of Appeal) that the AMT causes some extremely unfair taxation issues, but that it's the law and only Congress can change it. I'm sure that if this issue appeared in front of them, they'd say the same thing.

Lots of things in tax have shades of gray--they're open to interpretation. But if you're an amateur player, you can't net your wins and losses. That's black and white, and there's no way around it.

And just so you know, if you knowingly evade the Tax Code, you've committed tax fraud. That's a felony. Yes, most people don't go to prison. But do you want the hassles: the extra penalties, interest, and costs (in both time and money) or would you rather prepare your return correctly?

As I said in the article, the Tax Code isn't fair. Some parts are stupid. But only Congress can change it.

-- Russ Fox (EA)
co-author, "Why You Lose at Poker"

[Central Limit]

For B&M poker, why isn't one single hand a session? So, if I play 8 hours, and 250 hands, I should record each separately.

Because if one single hand isn't a session, then a session is determined by when I get up and when I sit down. If I get up to go to the restroom, does that end one session and start a new one? If not, then why can't I say that 8 hours of sleep was just a break in a single session rather than the dividing line between two separate sessions?

[Orlando Salazar]

If you make enough, pay some guy to find an offshore loophole and use your OSA debit card. If not, don't pay tax. Pretty simple.

[Dave2020]

If it is my first time filing as a professional, am I required to have already payed quarterly installments on my 2006 poker income?

[NickMPK]

Russ,

As a professional tax preparer, how do you advise losing recreational gamblers to report their gambling winnings/losses?

For example:
If someone takes a weeklong trip to Vegas, where they play fifteen sessions of blackjack, with a total of $10,000 in winning sessions and $11,000 in losing session, would you force them to report that $10,000 as income and then give up the standard deduction in order to offset this in losses?

What about someone who buys lottery tickets every day, with $1800 in losses and $600 in wins. Do they have to pay tax on the $600 if they want to take the standard deduction?

I think 95% of these people don't have any record of their "sessions". Aren't most people who do any gambling violating the law when they prepare their taxes?

[Wongboy]

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This is not difficult. You bust out a little program called Excel and record the results of every session on every site. I keep track of time played, beginning balance and ending balance for the session. Very simple.

[/ QUOTE ]

Please tell me how you define a session. The term is undefined by the IRS. Is it every hand, every year, or something else?