[Alan3]

It is worse than you think, luckycharms. You not only have to pay taxes on your winnings, you have to pay taxes on the winnings from all of your winning sessions. That means you take all of your winning sessions, sum the total, and you are responsible for paying taxes on that total. You can sum all of your losing sessions and use them as itemized deductions, but if you take standard deductions you are basically screwed.

The IRS requires you to log all of your sessions by hand on paper. They like paper trails because they think they are more difficult to fudge than electronic records. If you are audited and they find those winnings without those records then I hear they become very unhappy.

I've heard speculation that a lot of people might be audited in the future for past years when the online poker sites become legit and as part of the legality deal they provide the IRS with records of all player activity.