Implications for the slightly-above average dude

[David Berkowitz]

With all the hysteria about the DOJ and the IRS, I'm wondering whether there's really a chance that I, or someone like me, could really get boned by all of this. Right about now I'm stoked that I never was very good at poker. Lifetime winnings in online poker probably net out at $10,000 - $15,000. At no time did I ever have more than $10,000 in Neteller, and I've never cashed out more than $2,500 or so at a time. I've never paid taxed on poker winnings, when I asked my tax professional about this a while ago they said it was such small potatoes it didn't matter.

Is there really a chance that me or somebody like me is going to get boned for back taxes? I just can't imagine that the IRS would have the time or inclination to chase the thousands and thousands of people like me when there are undoubtedly bigger fish in the sea. And, if they did decide to stick it to me, it'd just be taxes and penalties, right?

[SplawnDarts]

What you did is criminal. There will be taxes an penalties, but also if convicted fines and jail time.

If I were you, I would file amended taxes for all previous years where you failed to report poker winning ASAP. The IRS probably already has the neteller info, and they WILL use it.

If you file amended taxes, you can claim you didn't know better and when you found out you immediatly paid what you owed. That will keep you out of jail.

[nineinchal]

Dewey, Cheatham and Howe, CPA's.

They work on a contingency basis.

[SplawnDarts]

Actually, I suppose I whould mention that you wouldn't go to jail. You'd go to a federal "pound me in the ass" prison. Just clarifying [img]/images/graemlins/laugh.gif[/img]

[Strickly Bidness]

there are so many guys on this site that like to instill fear in others. i've been audited for this kind of stuff and only paid interest on the money and sent them a check 4 yrs after the return. you aren't going to prison, so sleep good at night. basically, guys that spent their precious time filing taxes (as they should) are jealous that u did not and they want to talk about u going to "jail" or whatever. it wont happen. if u didnt file, just see if they contact you. if they do, just say u didnt know u were supposed to pay and they will let u pay at that point with 4% interest.

dont worry bro. if you want the specifics of how i was audited just pm me.

[Jerry D]

[ QUOTE ]
there are so many guys on this site that like to instill fear in others. i've been audited for this kind of stuff and only paid interest on the money and sent them a check 4 yrs after the return. you aren't going to prison, so sleep good at night. basically, guys that spent their precious time filing taxes (as they should) are jealous that u did not and they want to talk about u going to "jail" or whatever. it wont happen. if u didnt file, just see if they contact you. if they do, just say u didnt know u were supposed to pay and they will let u pay at that point with 4% interest.

dont worry bro. if you want the specifics of how i was audited just pm me.

[/ QUOTE ]

Listen to this post. Ignore the fear posts. Even someone like Willie Nelson who owed millions in taxes didn't go to jail. The IRS doesn't want tax evaders in jail - they want them working SO THEY CAN PAY the back taxes fine and penalities. They will only put you in jail if you refuse to pay after they audit you.

[geormiet]

[ QUOTE ]
Dewey, Cheatham and Howe, CPA's.

They work on a contingency basis.

[/ QUOTE ]

this never gets old for you does it?

[Karak567]

[ QUOTE ]
What you did is criminal. There will be taxes an penalties, but also if convicted fines and jail time.
=

[/ QUOTE ]

This is laughable. I'd like you to find me a case where a person who had 15,000 off the books and paid the fines and penalties as soon as the IRS found then went to jail. There's no chance in hell someone goes to jail for that as long as they cooperate.

[vinyard]

[ QUOTE ]

This is laughable. I'd like you to find me a case where a person who had 150,000 off the books and paid the fines and penalties as soon as the IRS found then went to jail. There's no chance in hell someone goes to jail for that as long as they cooperate.

[/ QUOTE ] FYP. Seriously, people, the hysteria needs to stop. Anybody, and I mean anybody, asserting that a player who ha missed filinf their off-shore form while otherwise paying taxes properly would be at risk of going to prison is a dolt.

Even if you were deliberately avoiding paying taxes its highly unlikely that there would be any penalty above and beyond the back taxes, fines and interest.

[Strickly Bidness]

Fellas, I'm gonna share my situation because silly worrying just takes years off of your life, and even if you made 100K and didnt file at all (in poker that is), you won't go to prison. Even when someone does go to prison for tax evasion, its not pound me in the ass prison, its a fancy white-collar place down in florida where Sam Waxell (founder and ceo of Imclone) is right now.

Ok disclaimer before I begin: ALWAYS PAY YOUR TAXES. I pay mine, and you should pay yours. When you are young and dumb you make mistakes and sometimes you get caught. I understand this. My general advice is not to play with the IRS because, even though u wont go to prison, its just not worth losing sleep over. Your happiness is much more important than 10-15K. If you want to stress yourself out, do it helping the 1000 kids that will die today in Sudan, not worrying about what the IRS will do to you over a few bucks.

Now what happened to me? Ok, I'm a winning poker player and pay taxes on it so my tax problem has nothing to do with poker. My wife and I both have real jobs and make lots of money, and pay huge taxes, so I've always figured tha the gov't wouldn't [censored] with me over the little stuff. I was mistaken. Back in 2003 when I was a young and dumb 20-something hustler making cash in many ways I purchased Nortel Networks (stock) for .45 with my ameritrade account and the stock shot up to 8 bucks. Needless to say, I made some cash that year on the side. The proceeds here were six figures, not a small 10-15K or whatever. Ok, for whatever reason I "accidently forgot" to put this on my tax forms. I just assumed that Turbo Tax auto downloaded it, but I was wrong. Honestly, I could have done a better job making sure that these stocks made their way to my forms, but I was young and dumb just like you guys and improperly filed my taxes in 2004.

Now, I just figured that the gov't/IRS wouldn't notice since they are disorganized and sloppy. Well they are disorganized and sloppy and would never catch a dishonest poker player because our IRS system is an honor system. The difference with me is that ameritrade submits these stock proceeds on a form to the IRS and when that happens (W-2s, 1099s, etc etc standard forms) then they do an auto-check for inconsistencies and you are guaranteed to be caught. I didnt know that, but now I do. Now pokerstars doesn't send anything to the gov't so no way the IRS will contact you. However, with Neteller turning over records there is a SLIGHT possibility that some auto checking can be done over the next few years.

What did the gov't do to me you might ask? Have I been getting raped in prison and pounded in the ass for the past 2 years ? No, I have not. Basically it took them about 2 years to get back to me and I got an INQUIRY letter in the mail. It wasn't even a real AUDIT, just an INQUIRY. I basically told the IRS agent that I screwed up and he made me pay what I owed with 4% interest. Of course, I also had to deal with the state of Indiana tax system because the feds told them what I had done. But still, no big deal, just paid and wasn't even charged penalties.

Lesson learned with all of this: Pay your taxes. Since that one episode I've always been 100% careful and honest with my taxes and will always do so. You guys don't need to worry about tax evasion too much. Just do your best in the future to pay your taxes 100%. Not because you will go to jail (because you likely will not) but because your mental happiness is worth more than 10-15K or even 100K....Its just money, be honest and you will live happier and longer and make more at poker because your psyche will be better.

I hope this makes you all feel better. The guys on 2+2 are kinda mean, and often talk about prison or whatever. Remember that the avg. poster here is like 22 years old and lives with his mom in the basement or whatever. I, on the other hand, happen to be 31 yrs old and know much more about the IRS because I've been filing my own taxes for over a decade. Methinks the guys on this site for the most part are kinda bitter that they paid taxes and you didn't, and poker players in general are kind of a bitter bunch. My advice is to just play this game for side income and for recreation, don't make it your life.

That is all. Ask anything u want.

SB