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

[genesisgkh1]

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Disclaimer: I am an attorney, but this is not legal advice, I know nothing about tax law other than my own research, etc. etc. etc. talk to a tax pro...

Russ,

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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.

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I agree with you that a 'session' according to the tax code is somewhere between 'time spent sitting down at a table' and a day, most likely the former. However, I disagree with you that an individual sit and go constitutes a session.

The reason why I disagree has to do with multitabling. I don't think *anyone* is advocating that somebody 8-tabling cash games is playing 8 different sessions at once. Indeed, that makes no recordkeeping sense even on sites that are supported by PT, much less ones that are not. Walter Lewis, Nelson Rose and every other gambling professional tax writer I've ever heard of basically agrees with the "keep a log book" approach, ie, Excel. But it is reasonably impossible to keep an individual *table* record using Excel on non-PT sites, although you can (and I do) keep track of overall performance using the cashier.

The same applies to people playing massive amounts of sit and gos. Certain people I know play upwards of 200 of them a day on a regular basis. That is not, by any reasonable definition, 200 sessions. The IRS (ie, the random individual that's in charge of the hypothetical audit we're talking about) may argue otherwise, but at some point, if this particular issue comes in front of a tax court, the judge *is* reasonably likely to exercise common sense. Additionally, even if you are audited and the auditor takes exception to this definition, you will not go to jail for arguing your point, since it is reasonable and you're not attempting to defraud anyone/did pay your taxes.

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The IRS has not defined a poker session. As far as I know, there are no hard and fast tax rules regarding reporting wins and loses by session, then having your poker site close down before you can cash out your winnings.

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There are. You fill out a form (I don't remember which one offhand) claiming that the site absconded with your money.

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This person is using professional and reasonable arguments in response to a real world situation. He should be banned from this forum immediately [img]/images/graemlins/laugh.gif[/img]

[adanthar]

Sodomy is no longer a crime. It is on the books in some places, but enforcing it is unconstitutional after Lawrence v. Texas [img]/images/graemlins/tongue.gif[/img]

[tagtastic]

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Sodomy is no longer a crime. It is on the books in some places, but enforcing it is unconstitutional after Lawrence v. Texas [img]/images/graemlins/tongue.gif[/img]

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exactly. legislation does not mean enforcement.

[wpr101]

How am I supposed to know something other than my net when I played without poker tracker before? I don't know a single person who records all their sessions. It's not a possibly for me to do this so I will be declaring net.

I hate threads like these because half the people say one thing and the other half another and you don't know who to believe.

[Wongboy]

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In fact, most casino's do not even allow you to take written notes of your results at the Blackjack table.

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I've never been stopped- what regulation are you claiming to refer to, regarding this?

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Thanks for the info in your post. I'm only replying to this part, but the rest is very helpful.

Casino's do not need to have a legal reason before they restrict your ability to do something at a blackjack table. I have been restricted from playing blackjack entirely at over 20 casinos, and been restricted from entering 2 casinos and the casinos involved never accused me of doing anything illegal or against regulations. I was suspected of the ability to play their game, under their rules, and maintain a long-term advantage in doing so.

In this case however, there is a very restrictive law called the device law in Nevada and similar laws that are on the books in every other state with casino gambling (most states model their law on Nevada's law). The law makes the use of a computerized or non-comnputerized device a felony.

From personal experience, I have had numerous casinos tell me that I could not write down information at a blackjack table. YMMV.

[707782]

I have lost tons of money gambling, will IRS give me back my refund?

[adanthar]

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How am I supposed to know something other than my net when I played without poker tracker before? I don't know a single person who records all their sessions. It's not a possibly for me to do this so I will be declaring net.

I hate threads like these because half the people say one thing and the other half another and you don't know who to believe.

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As an attorney who is conscientious about taxes, here is what I do (YMMV, not legal advice, consult tax pro, blah blah blah):

-Record all of my MTT's as separate sessions (Exitonly in MTT's has a spreadsheet that lets you do this very easily). Note that you probably *must* do this if you play on major sites, because, for one thing, there are Internet databases covering your performance; you can't even claim poor record keeping as a reasonable excuse, since there are sites doing it for you.

-List my SNG's as separate sessions, because I played a whopping 20 or so of them for the year, one or two at a time. If I played them full time as a non-professional, especially at non-PT sites, I would probably just net the cashier after I got up from the computer. There is no question that one sit and go played at one time constitutes one session, but 100 played in a 12 hour period is not 100 sessions in the common usage of that word in this field (which does have a certain amount of value in court.)

-List cash per 'time spent at the computer on each site'. If I play on Stars for 2 hours, I list the minutes I spent (roughly), stakes, and what I won/lost, taken from the cashier. I'm not about to track this for each of the 4-6 tables I play 10-100 hands on at any given time, especially since I usually play on Small Site X rather than Stars, and I think this is as much of a requirement as a court will ever impose on a *recreational gambler* (remember that a professional doesn't even need to worry about this in the first place*).

*As an aside, I think that in the near future, the IRS will not mind if someone claims both 'professional gambler' and a full time job on the return. This is based off the fact that they've been sending letters to people asking them to reclassify their hobby returns as pros, not vice versa. It is unlikely that they will ask people voluntarily paying SE tax to redo those returns solely because they have another job. Regardless, filing as a hobbyist when you should've filed as a pro or vice versa may eventually come back to cost you a few thousand, but again, if you did it in good faith you're not going to jail.

-Rakeback, bonuses, etc. are all 'income'. As a professional, I just put them in the cash spreadsheet since there's no tangible difference for me; non-pros may or may not be in a more interesting spot because some of those things are only tangentially gambling income, but if you put them in the 'cash' column and add a note, sorting it out will not be much of a problem later on.

I wouldn't want to get audited, of course, but I believe I've covered myself well enough to post what I do on the Internet [img]/images/graemlins/tongue.gif[/img]

[NickMPK]

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How am I supposed to know something other than my net when I played without poker tracker before? I don't know a single person who records all their sessions. It's not a possibly for me to do this so I will be declaring net.

I hate threads like these because half the people say one thing and the other half another and you don't know who to believe.

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I think that's because everyone is basically right.

The law says you have to separately report winnings and deduct losses by session.

However, this creates an unreasonably large burden on the part of the recreational gambler, almost none of whom follow the law. Moreover, if the IRS were serious about expecting people to follow this standard, they would at least force casinos and state lottery agencies and such to do more to notify people of the law.

The law is intended to be used as a weapon against people who have large gambling winnings and are disingenuous in reporting them.

If any losing recreational gambler were actually prosecuted for failing to report winnings and deduct loses, I would encourage them to challenge the constitutionality of the regulation. BTW, I am a lawyer, but I am not a tax lawyer.

Completely seperate from any legal opinion, I would actually encourage recreational gamblers to net their winnings and only report that rather than report large amounts in both wins and losses, unless they have had to fill out a W-2 for a gambling win during the course of the year. I think it will attract less attention from the IRS that way, and I don't feel it is unethical if you are reporting your net income in good faith.

[Soul Rebel]

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This one doesn't make sense:


So say a player plays ~5/10 NL 500,000 hands in year. Is he supposed to declare that he won $4,000,000 and lost $3,500,000? That is just rediculous. How the heck would you even keep track of all this? I mean yea you might have PT, but when you play on a different computer/different site?

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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.

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This is not a "very simple" thing to do. Do you even play poker? I am only declaring my net because it's the only thing that makes sense.

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What are you talking about? If I didn't play professionally, I doubt I would bother to go into this sort of detail, as it would not be necessary. My income is about 65% online cash games, 20% MTTs, and 15% rakeback. I have 3 excel tabs within one spreadsheet, one for each of these.

For the cash sheet, I have 9 columns. Date, Time session started, time session ended, total time played, site, game played, starting balance, ending balance, profit, and loss.
I record all of these for every site every session.

So for the last few columns, excel automatically does the math between the starting and ending balance, which equals the session's outcome. I move that number into either the profit or loss column. As a result, my profits are all in one column, and losses are in another. I sum each of the columns, and presto, I have my total wins and total losses.

MTTs are easier, you subtract buyins from total winnings. I record similarly detailed information for every MTT I play, with separate columns for buyins, rebuys, and cashes.

Lastly, my rakeback sheet has a column for every site I play on, and I simply record how much I made at each site for each month. At the end of the year I add all that together for my total rakeback.

[wpr101]

Adathar, how would I go about reporting say 4,000 sngs? I can look it up on sharkscope but it only shows a graph and ROI really. I haven't kept track of this. Plus sharkscope did not used to record every tourney.

On cash games, I've played probably 20% of my hands on computers they aren't mine or do not have pokertracker. Pokerstars doesn't keep track of these.

On MTTs, I have no record either.

Lastly, do FPPs count as rakeback since there is no direct conversion?