Scared of the IRS

[sports_quant99]

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.... I will pay taxes on as close to the net winnings as I can attain, less the amount frozen indefinitely (I will wait till the last minute to see if I ever get them).

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Assuming your frozen Neteller funds are from 2006 winnings, those are taxable on your 2006 return, regardless of if/when you ever collect them from Neteller (see my thread from last week on this).

You also want to look at the threads about Form TDF 90-22.1 (that's a whole other can of worms)

[7n7]

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Back in the good ole poker boom in early 04 when PT was first coming out I had no flipping clue that I had to pay taxes on poker winnings. I didn't find out for at least 6 months after I started winning significant $$$. Now I pay my taxes but to say people are not naive to know that they have to pay taxes on this internet poker thing is well...naive. I was 23 btw.

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Again, my point isn't to dispute that a lot of folks aren't ignorant of the tax laws. They're horribly complex, detailed and long.

It's to point the finger where the feds will point it (with the proof to back it up), at the tax-payer.

[tizlinda]

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Karak, et al...

If what you are required to do, and what you are going to do, are two different things... why are you telling a bunch of semi-anonymous posters (including the IRS) on this messge board, that you are going to do it?


What is the point of... "Hey look at me, I'm going to knowingly ignore the law" posts?

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I read a lot of posts in here that quite frankly sound like the posters think they are talking directly to the IRS and trying to convince them they are doing everything by the book. If any of you high and mightys are actually doing this then good for you and I'm glad you were aware and can sleep well. But don't think and project that those of us that were in the dark (far more than you think) deserve to pay the ultimate price whatever that may be for not being as insightful as you.

I'm talking about the people who, like myself, have never needed a CPA to do our taxes and have gambled as a hobby for years unprofitably until internet gambling came along. My taxes have always been done in 5 minutes. This has been an eye opener for me as well as others. I, for one, am not posting to say "look at me" I am ignoring the law, I am posting to say, Hey, am I the only one who thinks the law was unobvious at best, and downright ridiculous at worst? And am I the only one who has to deal with a situation where I don't have the documentation the law requires and faces the dilemma of claiming frozen neteller funds? I am not saying look at me, I'm saying who else out there is like me? And what are you planning to do about it?

[7n7]

My guess is that the majority of people in your situation won't report anything and pray they won't get audited. If you have no records of wins/losses, outside of guessing, what can you do?

Sniper didn't mean that you were out here flaunting your failure to pay taxes, only saying that you're leaving e-proof of that fact for the IRS to see should they so choose.

Recall that before internet poker, there wasn't a real good way to track your spending at a casino. Now, there's an electronic trail (e.g. Netteller, poker sites, bank statements).

If you do get audited, the punishment isn't death you know.

Ask your CPA what you can do.

[tizlinda]

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.

[Karak567]

[ QUOTE ]
Karak, et al...

If what you are required to do, and what you are going to do, are two different things... why are you telling a bunch of semi-anonymous posters (including the IRS) on this messge board, that you are going to do it?


What is the point of... "Hey look at me, I'm going to knowingly ignore the law" posts?

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I plan on paying my taxes. I fail to see where I said I was not going to pay my taxes. I have paid my poker taxes before; I just lumped summed them. The IRS never came knocking (it was a small amount). I am simply seeking advice on what you guys think of this session thing for when I file.

This time the amount, while still small in comparison to most people, is larger than last time.

However, whenever I ask what to do since my PT files are gone I am lectured about why I am so irresponsible and breaking the law (apparently asking what to do when I lost my records is breaking the law). This has happened before and I see poster after poster getting shot down and turned away due to this.

Let me make this easier:

I [censored] up. My harddrive crashed and I lost my records.

What do I do now? A CPA told me not to file because this is "too complicated" and will "cost too much to rectify."

I kid you not.

[Karak567]

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And as Snipe said, it's never wise to post about it on a public chat board.

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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?

Do you know what the IRS would have to go through to get my name? They would have to get my IP from 2+2 (which may or may not require a court order, depending on how Sklansky decides to play it). Then they would have to go to my ISP (which would require a court order).

Since I have stated, time and time again, I have paid my taxes in the past and will in the future and on top of that the amount of money I made is literally a grain of sand (even to the people on here) I doubt we have to worry about big brother tracking us down on a "public chat board" for displaying confusion on how to file.

I plan on seeking another CPA who will help me, but I just wanted to point out the fact that this board seems to be more about lecturing than helping on topics like this.

Edit - Maybe I am just grumpy tonight. I have always appreciated the advice and help Sniper has given on this forum; I was just a bit taken aback when he insinuated I had stated I did not want to pay my taxes, as that is something I take very seriously. I'll re-evaluate my post in the morning, don't take my words too harshly, please :-).

This is a very frustrating and nerve-wracking situation for all of us, I suppose.

[Poker CPA]

"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."

Dear tizlinda:

You're correct about the "murky" part. There are several other areas of the Tax Law in which the IRS makes it difficult for the average taxpayer. The key aspect of these issues is "THEY DON"T TRUST YOU" and they have the stats to prove it. Therefore they make laws that are murky and with limitations. This is true for gamblers, business use of cars, meals, entertainment, and the like. If you say 10,they say 8; if you say 8, they say 6 and so on and so on. Gambling is a pinic compared to taxpayers with a small business.

What a CPA can do is advise you how your gambling income affects your tax return, taking everything into consideration. Basicly what your exposure is and how it relates to "honest mistakes", all the way to "tax evasion". This is based on facts and circumstances, and every gambler is different. So do you have a big problem or a small problem? No one on the forum can tell you, because they don't have all of your tax information and circumstances. Most posters consider it a small problem, and will act accordingly. Other posters will will say it has to be done THIS WAY, or your breaking the law; TOTAL BS. I can honestly say that 99% of taxpayers filing the long forms break the law, sometimes in favor of the IRS. The current "Telephone Excise Tax Rebate" issue is all about gross negilence on the part of the US government, both taking the money and rebating it.

The current Neteller situation is a serious problem, especially if you have used their debit/ATM card. So you need to establish the following; "Whats my exposure" and then act accordingly.

[nineinchal]

The amount you are dealing with is inconsequential. Nobody reported your online winnings, so the IRS is not going down to your level.

IRS NABS TEACHER FOR NOT REPORTING UNDETERMINABLE POKE WINNINGS OF LESS THAN $6K!!!!

I don't think you are going to see that headline anytime soon, except if your return is prepared by the accounting firm of Dewey, Cheatham and Howe.

Just start keeping records for this year and hope you lose, this way you have no IRS problem.

[Sniper]

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What a CPA can do is advise you how your gambling income affects your tax return, taking everything into consideration. Basicly what your exposure is and how it relates to "honest mistakes", all the way to "tax evasion".

This is based on facts and circumstances, and every gambler is different.

So do you have a big problem or a small problem? No one on the forum can tell you, because they don't have all of your tax information and circumstances.

Most posters consider it a small problem, and will act accordingly. Other posters will say it has to be done THIS WAY, or your breaking the law; TOTAL BS.

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I think you overstate the issue in your last quoted sentence... and agree with the rest. Which is why it is important that the posters you criticize in your last sentence, responsibly continue to do what you criticize them for.