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

[ThreePutt]

OK, that generates another question. Does your log need to be a hand-written log or can it be an Excel spreadsheet? I believe the IRS regs indicate a hand-written log but again I imagine this was something that written well before the proliferation of PCs. If we're expected to follow rules that clearly were not written for online poker do we also need to follow the letter of the law on this?

[adanthar]

No. Electronic records are fine.

[Russ Fox]

[ QUOTE ]
No. Electronic records are fine.

[/ QUOTE ]

Sorry. For brick and mortar play, you need a "contemporaneously written log." That's what the IRS regulations specify.

There have been no cases about online play. Given its nature, I believe that electronic records are just fine for online play.

If you make a good-faith effort, you won't be held liable for most penalties. Good faith effort includes advice from tax professionals in most cases. However, the Tax Court and the Courts of Appeal have ruled in numerous cases that (1) you're liable for your tax return, and you're supposed to review it for accuracy even if it's prepared by a professional, and (2) if you know better than the professional on a specific matter, you can be held liable for penalties.

[ QUOTE ]
So to clarify, if I am playing say 5 tables of a cash game in "one sitting" during one day, I would have played one session and thus would report the net winnings or loses from that session. Or is each table I played considered an individual session?

Russ Fox maintains that this would be five sessions. I strongly disagree with this and I think if it ever got to court I would be proven correct. YMMV.

[/ QUOTE ]

I don't think that's the conclusion I reached in my article on "What is a poker session." Indeed, I wrote, "Now, what about an online player playing multiple games at the same time? Take Player E, who plays at one online site. He plays simultaneously at four different virtual tables: Tables 17 & 18 in $1/$2 Texas hold’em games and Tables 19 & 20 in $1/$2 Omaha games. E wins $10 at Table 17, loses $20 at Table 18, wins $30 at Table 19 and loses $5 at Table 20 while playing these tables simultaneously during the same one-hour period.

There are no rules created by the IRS to treat online gambling differently than gambling in a bricks & mortar cardroom. This means that we can apply the above rule. E has two sessions, a loss of $10 in hold’em and a win of $25 in Omaha." You can find more in the article I wrote, available here.

[ QUOTE ]
First of all, there is no law saying that we have to pay federal income tax.

[/ QUOTE ]

lol. To that individual, if you are caught by the IRS...or I should say when you're caught by the IRS, you will pay your tax, plus interest, plus penalties. When people come to me claiming that there's no income tax, or only foreign income is taxable, I direct them to the Tax Protestor FAQ. Courts have heard all of these schemes before, and they're not amused at all by them. Wesley Snipes will be discovering that in the coming months.

-- Russ Fox
co-author, "Why You Lose at Poker"

[adanthar]

[ QUOTE ]
[ QUOTE ]
No. Electronic records are fine.

[/ QUOTE ]

Sorry. For brick and mortar play, you need a "contemporaneously written log." That's what the IRS regulations specify.

[/ QUOTE ]

Right. But 'contemporaneously written' can include Excel, providing, of course, that you are entering your wins/losses immediately after you get back to your house and not six months later.


[ QUOTE ]
[ QUOTE ]
So to clarify, if I am playing say 5 tables of a cash game in "one sitting" during one day, I would have played one session and thus would report the net winnings or loses from that session. Or is each table I played considered an individual session?

Russ Fox maintains that this would be five sessions. I strongly disagree with this and I think if it ever got to court I would be proven correct. YMMV.

[/ QUOTE ]

I don't think that's the conclusion I reached in my article on "What is a poker session." Indeed, I wrote, "Now, what about an online player playing multiple games at the same time? Take Player E, who plays at one online site. He plays simultaneously at four different virtual tables: Tables 17 & 18 in $1/$2 Texas hold’em games and Tables 19 & 20 in $1/$2 Omaha games. E wins $10 at Table 17, loses $20 at Table 18, wins $30 at Table 19 and loses $5 at Table 20 while playing these tables simultaneously during the same one-hour period.

There are no rules created by the IRS to treat online gambling differently than gambling in a bricks & mortar cardroom. This means that we can apply the above rule. E has two sessions, a loss of $10 in hold’em and a win of $25 in Omaha." You can find more in the article I wrote, available here.


[/ QUOTE ]

My apologies - it looks like we agree on the definitions of a cash game session, at least. I would follow up by saying SNG's in mass quantities aren't discrete events, either, but I do understand where you are coming from.

[Russ Fox]

[ QUOTE ]
But 'contemporaneously written' can include Excel, providing, of course, that you are entering your wins/losses immediately after you get back to your house and not six months later.

[/ QUOTE ]

The Tax Court has ruled that written means hand-written. While an Excel spreadsheet might be acceptable, a written logbook will be accepted (provided it meets the other requirements of a gambling log). You can purchase a small notebook for under $1 in any office supply store. If you're a professional, buy three; you can use one for your mileage log (which also must be written).

-- Russ Fox
co-author, "Why You Lose at Poker"

[Slappz]

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

I just read the whole thread and I feel just as confused as before.