IRS Withholding on US Tournament Winnings Starts in 2008
 

Starting March 2008 the IRS will require casinos to take withholding from any net tournament winnings over $5000.

This is a link to an article about the old procedures, but there is a link in the upper right of the page to today's new rules.
http://www.gambling-law-us.com/Artic...-debunking.htm

Shirley
http://www.poker-babes.com/

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

Isn't this something that The PPA should be strongly crying out about?

Where are they?

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]
Isn't this something that The PPA should be strongly crying out about?

Where are they?

[/ QUOTE ]

They posted the article on their home page. They don't mention taking a position.

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

i'm curious, why is this a bad thing?

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]
i'm curious, why is this a bad thing?

[/ QUOTE ]

IMO if the PPA is going to support taxation of on-line poker through the use of lisencing fees, it should demand some common sense changes to gambling taxation in return. Why agree in one respect and perhaps hope to change the bad law later?

Most people don't understand how badly F'ed up current taxation of poker is!

I have no problem with withholdings, and I can see that any position of the PPA that sounds reasonible must agree to have provisions so that the Federal and State governements can get their greedy grubby hands on any taxes currently due them under existing law.

But IMO, the PPA should make it clear that existing tax laws on poker make it very easy to create a much higher tax than is justified. You can have a loosing year or even a break-even year and owe a ton of tax under existing laws.

IMO our position should be, we have no problem paying taxes on real income, but strongly oppose paying taxes on phantom income.

If we do not address this issue at the begining, when the tax revenue calculations on lisencing and tax collection are formed, we will be in the position later of facing the arguement that we are "costing the US government money" or creating "tax-breaks" for poker players.

Any deal on regulation, lisencing, etc, is the only time to correct this problem, you wait and it's too late as the projected revenue stream will be spent at least two times over.


D$D

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]
[ QUOTE ]
i'm curious, why is this a bad thing?

[/ QUOTE ]

IMO if the PPA is going to support taxation of on-line poker through the use of lisencing fees, it should demand some common sense changes to gambling taxation in return. Why agree in one respect and perhaps hope to change the bad law later?

Most people don't understand how badly F'ed up current taxation of poker is!

I have no problem with withholdings, and I can see that any position of the PPA that sounds reasonible must agree to have provisions so that the Federal and State governements can get their greedy grubby hands on any taxes currently due them under existing law.

But IMO, the PPA should make it clear that existing tax laws on poker make it very easy to create a much higher tax than is justified. You can have a loosing year or even a break-even year and owe a ton of tax under existing laws.

IMO our position should be, we have no problem paying taxes on real income, but strongly oppose paying taxes on phantom income.

If we do not address this issue at the begining, when the tax revenue calculations on lisencing and tax collection are formed, we will be in the position later of facing the arguement that we are "costing the US government money" or creating "tax-breaks" for poker players.

Any deal on regulation, lisencing, etc, is the only time to correct this problem, you wait and it's too late as the projected revenue stream will be spent at least two times over.


D$D

[/ QUOTE ]

I hope you'll write to Congress and to the PPA to express that. It sounds like you'll make it clear that you wish to pay your taxes like everyone else, but that our taxes should be the same as everyone else's.

By the way, FoF has repeatedly tried to get the federal deduction for gambling losses eliminated, such that if you win $100,000 and lose $300,000, you may taxes on $100,000 in income. They say the deduction subsidizes an industry that "destroys America's families". [img]/images/graemlins/confused.gif[/img]

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]


I hope you'll write to Congress and to the PPA to express that. It sounds like you'll make it clear that you wish to pay your taxes like everyone else, but that our taxes should be the same as everyone else's.

By the way, FoF has repeatedly tried to get the federal deduction for gambling losses eliminated, such that if you win $100,000 and lose $300,000, you may taxes on $100,000 in income. They say the deduction subsidizes an industry that "destroys America's families". [img]/images/graemlins/confused.gif[/img]

[/ QUOTE ]

We are likely never to win over the "sin tax" crowd. Yes I have made this position clear to the PPA, and will continue to do so. This is an educational crusade for me. Most US players don't know how truely horrible the current tax laws are. Currently with no withholding and no reporting, the only risk US players face is undocumented income from on-line withdraws.

So the issue for me is to educate as many players as I can, and hope my voice is heard by the lobbing arm of the PPA. IMO if we plant the seed when discussing lisencing, taxation, and regulation by making it clear we have no problem paying our FAIR share, but no more, we have a good shot at dealing with the issue as a whole.

This would be further supported by any wins in the "skills" arguements. We would then liken our arguement to stock, real estate, and similar "speculation" (really a risk reward arguement). This would be a best case senario for us as a poker carve-out rather than an accross the board change in gambling taxation, IMO, is about all we have to hope for in the current political climate.

IMO we need to embrace gambling causes that don't put us too far in that crowd to reap the general rewards, like the KY race, but keep our independence enough to not loose to the fears of unrestricted gambling. It will be a hard road to stay on, but there is enough of a logical foundation for us to at least to attempt to try it.


D$D

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

I would hope the AGA was on board as well. Money that goes to the IRS is beyond dead. But apparently they can't even get decent CTR laws/regs. God knows the two orgs should work together at some point.

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

John Pappas just sent me an email informing me that the PPA is committed to fighting this.

[ QUOTE ]
When I say fight, I mean attorneys, appeals and lawsuits. We have agreed to commit the money.

[/ QUOTE ]

PPA is heading in a new direction. New leadership and new digs....they still have to prove they'll do what they say, but I hope we'll all give them a chance and keep an open mind. After all, Pappas' transition period has been more productive than the past year was.

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]
John Pappas just sent me an email informing me that the PPA is committed to fighting this.

[ QUOTE ]
When I say fight, I mean attorneys, appeals and lawsuits. We have agreed to commit the money.

[/ QUOTE ]

PPA is heading in a new direction. New leadership and new digs....they still have to prove they'll do what they say, but I hope we'll all give them a chance and keep an open mind. After all, Pappas' transition period has been more productive than the past year was.

[/ QUOTE ]

Boy I sure hope they don't spend much money on this one!

Of the 30,000,000 million poker players in the US how many play in live events where the buy-in is more than $5,000.00???

You can discount almost all on-line sites. Other than what 3-4 major events a year affecting no more than 20,000 players all who would have to file returns in the US and who were not professional gamblers who does this help?

Professional gamblers have to file quarterly estimates, this actually helps them with their paperwork! Non-US players perhaps have to check a box that they are not affected by the law or have to file to get a refund.

If you are winning $5,000 events you already have to among the very few of the entire PPA membership for this law to affect you. Yes as a step for poker players it is a negative in general, but it is not a fight that concerns the majority of the membership, any more than getting easier tax write offs for corporate jets is for most businesses.

I would hope that the PPA doesn't go overboard on this one!!! Unless it is part of an overall tax strategy it's a looser. Public relations wise for the PPA it is even worse!

What any half decent grassroots political hack like me could do with just the retainer any lawyer is going to get could have much better ROI for the whole membership!!!

Boy I hope John will reconsider this one...........


D$D

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

Not $5K buy-in...$5K in winnings.

As for PPA, they need to start fighting back on tax issues, so this seems to be a good area for them to make the right connections and to show some strength.

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

This is for winnings of 5K or more, not buy-ins. I'm not much of a MTT player myself, but it seems to me that it wouldn't be tough for a $20 or $30 tournament to pay out that much, especially with rebuys.........

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]
Not $5K buy-in...$5K in winnings.

As for PPA, they need to start fighting back on tax issues, so this seems to be a good area for them to make the right connections and to show some strength.

[/ QUOTE ]

O.K. a net of $5k.

Even still it is a looser.

What is our position? You can trust us to pay our own taxes? We don't like the paperwork? We don't like the idea of with-holding? The IRS is a money grubbing whore?

All might indeed be true, but in the light of the majority of poker players who only hope to someday win $5,000 in a tourney to be faced with such a "problem"??? All the IRS is going to do is with-hold the third tier of tax rates? Not the top! That I could see as worth an arguement.

More paperwork for organizers of poker events? So what most people would say.

It puts on the side of saying in effect we are going to fight against paying taxes under current tax law. No one likes paying taxes, but this disolves any future arguement that we are willing to pay fair taxes on winning from poker which is a winner.

Why back by the PPA's efforts a measure that affects a minority of the "membership", looks bad, and creates future problems? I'm sure the majority of paying members, pro players and the casionos B&M and on-line, want to see this fought tooth and nail. But spending a lot of money of this non-issue now is a major mistake, given the number of basic issues the majority of poker players the PPA hopes to represent really care about!

Now look at it from the perspective of a non-poker player! Winning poker players don't want to be subject to with-holding? Where is the hook?

It gets even worse from the perspective of those that oppose poker and gambling in general. Most people know that if you make a $10,000 transaction you create paperwork. Most people know that in a casino you get a W-2G. To fight this issue as the PPA is a big looser!

Let the casinos both live and on-line fight it if it's a problem for them. Pro players it's another piece of paper and a little more work for your accountant to add up. For the vast majority of the 30 million "average" poker players, we either will never be affected or hope we have to deal with as many of these damn pieces of paper, saying we netted more than $5,000 a tourney, we can get our hands on a year!!!!!!!

This is a PR nightmare waiting to happen,

D$D

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]
[ QUOTE ]
Not $5K buy-in...$5K in winnings.

As for PPA, they need to start fighting back on tax issues, so this seems to be a good area for them to make the right connections and to show some strength.

[/ QUOTE ]

O.K. a net of $5k.

Even still it is a looser.

What is our position? You can trust us to pay our own taxes? We don't like the paperwork? We don't like the idea of with-holding? The IRS is a money grubbing whore?

All might indeed be true, but in the light of the majority of poker players who only hope to someday win $5,000 in a tourney to be faced with such a "problem"??? All the IRS is going to do is with-hold the third tier of tax rates? Not the top! That I could see as worth an arguement.

More paperwork for organizers of poker events? So what most people would say.

It puts on the side of saying in effect we are going to fight against paying taxes under current tax law. No one likes paying taxes, but this disolves any future arguement that we are willing to pay fair taxes on winning from poker which is a winner.

Why back by the PPA's efforts a measure that affects a minority of the "membership", looks bad, and creates future problems? I'm sure the majority of paying members, pro players and the casionos B&M and on-line, want to see this fought tooth and nail. But spending a lot of money of this non-issue now is a major mistake, given the number of basic issues the majority of poker players the PPA hopes to represent really care about!

Now look at it from the perspective of a non-poker player! Winning poker players don't want to be subject to with-holding? Where is the hook?

It gets even worse from the perspective of those that oppose poker and gambling in general. Most people know that if you make a $10,000 transaction you create paperwork. Most people know that in a casino you get a W-2G. To fight this issue as the PPA is a big looser!

Let the casinos both live and on-line fight it if it's a problem for them. Pro players it's another piece of paper and a little more work for your accountant to add up. For the vast majority of the 30 million "average" poker players, we either will never be affected or hope we have to deal with as many of these damn pieces of paper, saying we netted more than $5,000 a tourney, we can get our hands on a year!!!!!!!

This is a PR nightmare waiting to happen,

D$D

[/ QUOTE ]

Yeah, taxes are not an issue to expend political capital on atm. But, the process would make almost no noise if put into effect in our favour. You know as a lobbyist, that when you ask for something, someone wants something back.
We have to get the internet back in poker for the recreational player, first and foremost. Though tax treatment would be an effective recruitment tool at next year's WSOP. Maybe we can democratically take over our own union and start doing things to benefit the poker community.

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

I don't play MTTs myself, so I'm not sure how many players would make this. However, I see the following issue occuring in Vegas:

Pay $2,500 for tournament. Win 10K. Get 7,500. Now you're unable to play the main event.

Do you really think that you're gonna get that money back from the IRS after they have it?

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

Edited per request

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

John Pappas replied to this issue as follows:


Quote:
--------------------------------------------------------------------------------

I would also point out that this ruling, as I understand it, is based on the IRS opinion that poker is not a game of skill and should be taxed at the same rate of “wagering pools” like lotteries.

I think this is an issue that effects all poker players, not just high stakes pros. The PPA will dedicate the appropriate amount of time on this effort and will be sure that it does not slow us down on other fronts ...


--------------------------------------------------------------------------------
This was an issue I was concerned about at the beginning. Poker tourneys should be treated the same as Golf, chess, bridge, tennis etc...

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]
Yeah, taxes are not an issue to expend political capital on atm. But, the process would make almost no noise if put into effect in our favour. You know as a lobbyist, that when you ask for something, someone wants something back.
We have to get the internet back in poker for the recreational player, first and foremost. Though tax treatment would be an effective recruitment tool at next year's WSOP. Maybe we can democratically take over our own union and start doing things to benefit the poker community.

[/ QUOTE ]

John Pappas replied to this issue as follows:

[ QUOTE ]
I would also point out that this ruling, as I understand it, is based on the IRS opinion that poker is not a game of skill and should be taxed at the same rate of “wagering pools” like lotteries.

I think this is an issue that effects all poker players, not just high stakes pros. The PPA will dedicate the appropriate amount of time on this effort and will be sure that it does not slow us down on other fronts ...

[/ QUOTE ]

It sound appropriate to me. If we're going to get the tax justice we want, long-term, we should start by fighting it being designated as a wagering pool.

Here's a post from www.taxabletalk.com/posts/1188594494.shtml

[ QUOTE ]
Poker Tournaments Takes a Hit
Back in 2005, I speculated that the IRS would write a regulation requiring withholding from poker tournaments. The IRS will, on Tuesday, announce Revenue Procedure 2007-57, requiring withholding from any winner of a poker tournament who has received more than $5000 in winnings from the tournament......

Posted by Russ on Friday August 31, 2007 at 2:08pm

[/ QUOTE ]

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

So If I play 1k tourney today won 6k pay tax on those 5K.
Then tomorrow I play 5k tourney and lose.
Next day I play 2k tourney and won 7k pay tax those 5k (which is 1k) again.
Then next next day I play 5k and lose.
I suppose to break even on those 4 Tourney but now I'm -2k?

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]
So If I play 1k tourney today won 6k pay tax on those 5K.
Then tomorrow I play 5k tourney and lose.
Next day I play 2k tourney and won 7k pay tax those 5k (which is 1k) again.
Then next next day I play 5k and lose.
I suppose to break even on those 4 Tourney but now I'm -2k?

[/ QUOTE ]

I don't follow your math.

I am assuming 20% withholding like a waitress or something.

You win 5k, you carry 4k out the door. next day you lose early, you carry nothing out the door and pay no taxes.

At the end of the year, you total up your losses and buyins, subtract from your total winnings and pay taxes on the difference.

What am I missing? Is this even an issue? If you go onto "Who Wants to be a Millionaire" and win $250,000, I can assure you you do not pocket the whole $250,000. Uncle gets his take right up front.

A lot of folks that are not on a regular salary get withholding taken out.

[img]/images/graemlins/confused.gif[/img]

Tuff

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]


John Pappas replied to this issue as follows:

[ QUOTE ]
I would also point out that this ruling, as I understand it, is based on the IRS opinion that poker is not a game of skill and should be taxed at the same rate of “wagering pools” like lotteries.

I think this is an issue that effects all poker players, not just high stakes pros. The PPA will dedicate the appropriate amount of time on this effort and will be sure that it does not slow us down on other fronts ...

[/ QUOTE ]

It sound appropriate to me. If we're going to get the tax justice we want, long-term, we should start by fighting it being designated as a wagering pool.

Here's a post from www.taxabletalk.com/posts/1188594494.shtml



[/ QUOTE ]

This is a different issue from the one originally suggested, but still a tricky one to argue. You can make the skills game arguement to make your point about that point, but you loose over all.

The arguement in the past and the IRS battle has been how to get as much gambling income reported on W-2Gs. In the past "table games" have had an exemption based on the arguement that the casino didn't know how much a person cashing out really had at risk. You could cash out for $7,000, and no one knew if you started with $100 or $25,000 in chips.

But in a poker Tourney your amount at risk is known, it gets a little tricky for re-buy events a potential arguement, but in general the case law and precedence of previous decisions you end up at the same point -- withholding.

I'm sure poker was over looked for years because it is commonly thought of as a table game as it's played on a table, and for years the majority of poker was ring games. With the explosion of the popularity of tourney poker someone at the IRS figured they had to get their hands on Jamie Gold's winnings.

Sure all the IRS needs to do is contact Cynthia McGreevy to get her boss Blaise G. Dusenberry to do a little more homework and cite the correct laws statues or previous decisions.

Because this is a technical issue, IMO, we poker players and the PPA need to make sure we make it clear we have no problem paying a fair tax on winnings. Using this issue to further the "fairness" of only paying taxes on net winnings vs. gross winnings gives it a hook that might resonate enough to justify significant expense.

In the end with-holdings from tourney wins are here to stay, the questions is how do we use that for our best purposes in the future? Getting the IRS to cite the proper laws is important. But in the long run actually having more people experience paying taxes on phantom income {the win one tourney loose two and pay taxes on a loss situation} increaes our chances for the major fight win.

D$D

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]
What am I missing? Is this even an issue? If you go onto "Who Wants to be a Millionaire" and win $250,000, I can assure you you do not pocket the whole $250,000. Uncle gets his take right up front.

A lot of folks that are not on a regular salary get withholding taken out.


[/ QUOTE ]

The problem is that for professional poker player, when they hit a 'big score like $250,000' it's not all winnings.

Most of it has to cover the entries of tournaments where they didn't win anything. But if the IRS is keeping a big chunk of the bankroll, it's difficult to do so.

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

Posted in the "Was This To Be Expected" Thread as well with additions highlighted.


<Addition>
This is also in keeping with the online method used by all the ‘skill’ gaming sites.

On those, you deposit and with draw, redeposit and so on. If you hit big and the withdraw reached $600.00 BEFORE you can withdraw more, you must fill out the W2G form and taxes are withheld then on amounts above the $600.00 level.
<End Addition>


I have watched and read posts on this subject for sometime now.

The reality for business is the same for pro poker players.

Small business pays taxes by the quarter. If, when I was running mine I had a great quarter, I paid taxes on it. Later, if the next two were bad, I paid less.
At the year-end, taxes are then refigured on the total year, if I paid too much for that great quarter, I got it back.

Same in poker. Taxes are figured and paid per tournament / quarter.
At the year-end they are recalculated for the ENTIRE year, any over payment is refunded.

As a note, if a business ends up in the negative that is NOT carried over to the next year you start all over again at zero.

The ONLY difference is say I had OTHER income from stocks / bonds / rentals or whatever. IF my business lost money I could apply that loss to my other income.

With Poker / Gambling you cannot. Fair, no; the small business model is used by many to ‘lose’ some money to offset other income.

With that in mind, let me tell you, there are many ways to ‘lose’ money while actually making money.

obg

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]

.
.
But if the IRS is keeping a big chunk of the bankroll, it's difficult to do so.

[/ QUOTE ]

I was under the impression they kept 20%. Does the amount vary? Anybody know?

Tuff

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

The PPA needs to pick its fights carefully. If they spread themselves out on too many issues, they won't be effective. And if the PPA is to survive (so that it can fight these kinds of tax issues), the first thing it needs to accomplish is the legalization of online poker. Nothing is more important, and anything else is just a distraction.

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

Does anybody know how this would effect satellites?

Lets say you enter a $250 super satellite to the WSOP main event and win a $10,000 seat. Is there going to be withholding from that "tournament" to the tune of $2,500 leaving you only $7500 or enter the main event?

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]
Does anybody know how this would effect satellites?

Lets say you enter a $250 super satellite to the WSOP main event and win a $10,000 seat. Is there going to be withholding from that "tournament" to the tune of $2,500 leaving you only $7500 or enter the main event?

[/ QUOTE ]

Best question I've seen yet!

D$D

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

My guess, since that would be a 'prize' not unlike winning a car worth 10K, you would receive a 1099 form for 10K.


obg

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]

My guess, since that would be a 'prize' not unlike winning a car worth 10K, you would receive a 1099 form for 10K.


obg

[/ QUOTE ]

But unless the satellite was run by the main event sponsor, or the main event sponsor allowed 3rd party direct registration the prize is paid in cash.


D$D

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]
The PPA needs to pick its fights carefully. If they spread themselves out on too many issues, they won't be effective. And if the PPA is to survive (so that it can fight these kinds of tax issues), the first thing it needs to accomplish is the legalization of online poker. Nothing is more important, and anything else is just a distraction.

[/ QUOTE ]

Part of that is establishing that poker is a game of skill, not luck. I think we have a need to be here getting poker seen as skillful by the IRS. If we win this argument, we'll be far better off.

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]

Part of that is establishing that poker is a game of skill, not luck. I think we have a need to be here getting poker seen as skillful by the IRS. If we win this argument, we'll be far better off.

[/ QUOTE ]

That argument can't be won. No amount of proof will be
acceptable to the IRS.

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

Time for casinos to change the payoff schedule for tournaments
with prize pools under $50K. 1st place is $5K. 2nd to 9th
will win much more money. No need for deals on the final
table.

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]
[ QUOTE ]

Part of that is establishing that poker is a game of skill, not luck. I think we have a need to be here getting poker seen as skillful by the IRS. If we win this argument, we'll be far better off.

[/ QUOTE ]

That argument can't be won. No amount of proof will be
acceptable to the IRS.

[/ QUOTE ]

Okay. Let's just give up now.

Seriously, this is a new ruling, and we need to fight back on it. We don't "know" how the IRS will rule until we try, really.

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]

Part of that is establishing that poker is a game of skill, not luck. I think we have a need to be here getting poker seen as skillful by the IRS. If we win this argument, we'll be far better off.

[/ QUOTE ]

That argument can't be won. No amount of proof will be
acceptable to the IRS.

[/ QUOTE ]

Okay. Let's just give up now.

Seriously, this is a new ruling, and we need to fight back on it. We don't "know" how the IRS will rule until we try, really.

[/ QUOTE ]

If you prove to the IRS that there is skill in poker,
you're going to make a lot of club prop players very
unhappy.
Many years ago the IRS had a group of agents playing
poker to determine how to tax club prop players. All
the agents lost. The IRS concluded that poker was
unbeatable. Saved prop players tons of money and
headaches with paperwork.

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]
[ QUOTE ]

Part of that is establishing that poker is a game of skill, not luck. I think we have a need to be here getting poker seen as skillful by the IRS. If we win this argument, we'll be far better off.

[/ QUOTE ]

That argument can't be won. No amount of proof will be
acceptable to the IRS.

[/ QUOTE ]

I think you miss the legal distinctions involved. It is not an arguement that poker is all skill and no luck. The skills game arguement is that there is a significant amount of skill involved and the outcome does not depend only on luck.

The reason for the PPA's involvement in this issue is the reg cites rules established for wagering pools and lotteries in adittion to the ones concerning gambling in general.

This does need to be challenged. IMO it will not required a very expensive effort. But IMO the end result will be the same, with-holdings from trouney wins.

Yes it is a technical legal arguement, and one that can be won, but it is not one that will cause the whole reg to fail. All it will take is for the IRS to modify the reg to cite the appropiate law (if such laws exist). Given the background of law on gambling winnings, and the existing laws and negociations with the casinos on table games reporting I assume such laws and regulatory background exists. I'm not a lawyer so I can't speak to this issue with complete confidence.

But in the end do not expect this rule to go away, nor should you critize the PPA when and if they win their legal distinction but with-holding become a reality.

Creating too big a buzz about this issue and anouncing that you might fight it tooth and nail, is part of the PR nighmare I've refered to in past posts.


D$D

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]
I don't play MTTs myself, so I'm not sure how many players would make this. However, I see the following issue occuring in Vegas:

Pay $2,500 for tournament. Win 10K. Get 7,500. Now you're unable to play the main event.

Do you really think that you're gonna get that money back from the IRS after they have it?

[/ QUOTE ]

Yes you would get it back at the end of the year, its a credit on taxes payable. It would all even out in the end.

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

[ QUOTE ]
Yes you would get it back at the end of the year, its a credit on taxes payable. It would all even out in the end.

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I sure hope you're right [img]/images/graemlins/wink.gif[/img]

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

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Yes you would get it back at the end of the year, its a credit on taxes payable. It would all even out in the end.

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I sure hope you're right [img]/images/graemlins/wink.gif[/img]

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Getting a refund on excess taxes is standard. Tax returns file the same whether taxes are owed or due to be refunded. The only difference is the underwithholding penalty. Still, we should not be treated like a lottery pool.

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

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the first thing it needs to accomplish is the legalization of online poker. Nothing is more important, and anything else is just a distraction.

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That's your opinion, I strongly disagree.

Re: IRS Withholding on US Tournament Winnings Starts in 2008
 

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The PPA needs to pick its fights carefully. If they spread themselves out on too many issues, they won't be effective. And if the PPA is to survive (so that it can fight these kinds of tax issues), the first thing it needs to accomplish is the legalization of online poker. Nothing is more important, and anything else is just a distraction.

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Part of that is establishing that poker is a game of skill, not luck. I think we have a need to be here getting poker seen as skillful by the IRS. If we win this argument, we'll be far better off.

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This is actually a great issue to talk about. The examples that come up illustrate the fact that some poker players win.