[JPFisher55]

Russ, I agree with you in general. I just think the case about slot machines is hysterical. It just cracks me up that the IRS lost this case. A professional slot machine player? Give me a break. Next is a professional roulette or craps player? Isn't it supposed to be possible to make a profit to be considered a profession?
I am not surprised that if someone lists gambling income as most of his income, then the IRS says "you're a professional so pay self-employment tax." But when maybe only a portion like 1/2 is gambling income, then you can't be a professional (you have already paid FICA tax so you will not have to pay much additional self-employment tax) and deduct expenses. Of course, if the income limit on FICA or self-employment taxes is removed, then everyone who gambles much at all will suddenly be a professional. What at tax code.
Since I play online poker, I keep records of my wins or losses by the day. No one knows what a session is for online poker, but I believe that a day will suffice if you have good records. This will be the first year that I have substantial winnings to report. In the past, I have been involved with a couple of disputes with the IRS. Both times the IRS offered a settlement below the cost of litigation. You are right about most cases being settled. I think that the IRS thought that the slot machine case was a sure winner and wanted to make an example of the taxpayer. Their attorney must have been stunned by the Tax Court ruling. I am still giggling. Hehe