Scared of the IRS

[7n7]

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Let's not get ridiculous. If we were posting about millions of dollars we made it would be one thing, but over something as trivial as this?

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*sigh* If it's so trivial, then what are you stressing about? As I said before, the penalty for an audit isn't death. If you get audited, you'll probably owe, plain and simple.

I think I saw recently that 1/100 get audited these days. So trivial or not, it can happen even to us small potato folk. You can choose to worry about it now or cross the bridge when/if you get there I guess.

Fyi, cold, hard facts seem to be the norm here. Remind you of anybody? (Hint: IRS)

[Poker CPA]

I think its understated, in regard to the OP. To you, maybe overstated, its based on facts and circumstances. I only know what she posted about her tax situation. Yours I have no idea. Its about her, and anyone who feels the same way she does. She feels TRAPPED by an imperfect system.

But you have a POINT.

[gurgeh]

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I don't have a CPA, but after reading the myriad of posts on here, I'm not so sure it would make a difference. It appears that any two CPA's can argue over the law and many on here are supposedly tax professionals doing just that from the arguement over just exactly what a session is, to frozen neteller funds, to filing that foreign bank account form. This is the reason why I am scared of the IRS. It would make sense for them to come right out and clear up all of these issues (Im sure all the tax experts will immediately now post how clear it all is, with differing opinions of course). As it stands, it is all very murky for me.

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My CPA told me that not only are losses not deductable, it is your winnings by hand that you need to pay taxes on in MA. She then said that this is generally recognized as crazy, but there has not been a court case yet to set a specific precedent. She advised me to report and pay taxes on my net.

[Poker_Ace]

The risk of what most people think of as an audit is much smaller than 1%. In order to scare people into thinking the risk of audit is much higher than it is, the IRS counts "correspondence audits" and the like in its audit statistics; e.g., you forget to report $20 in interest from a checking account, the IRS gets a 1099 from your bank and sends you a letter saying you owe $8 in taxes as a result; that counts as an audit in the stats.

http://www.trac.syr.edu/tracirs/high...dividualG.html

[Poker CPA]

Your sample size is wrong with regard to your point. Your sample size includes the short forms, 1040EZ and 1040A.

But the important item is the "face to face" is down by 66% over a 13 year period (92 ~ 04). And this is in fact true. Any honest preparer can confirm this drop. The staff auditors are grossly incompetent, especially in major Northeast cities. Yeah for the public school systems in these cities. But Las Vegas has the largest and best IRS office in the nation.