How will part-time players survive a regulated poker site?

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Well that is good news that losses can be deducted for part-time players. I should have a little more faith in our tax system I think [img]/images/graemlins/smile.gif[/img]

[repulse]

As far as the tax issue interacts with the prospects of regulation... I earnestly hope that regulation and increased IRS scrutiny would be a catalyst for overhauling this stupid aspect of poker taxation.

(I'm pretty naive about how change like this actually comes about, though. The fantasy world of rational policy seems to coincide less and less with the US... especially the US tax system.)

[Tomcruise]

gl

[Poker Clif]

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. . . First off, most players don't NEED to submit the data, you need to report the gross wins and the gross losses.

Only if audited, or otherwise requested by the IRS or state tax agencies, will non-pros have to provide individual session records.....

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Well, yes, but. . .

There is nothing prohibiting you from appending additional information to your form, and it may even help to head off an audit.

The IRS has what they call "audit flags". That is, they look to see if something is normal for your situation.

For example, a lot of travel expenses may be considered normal for a salesman, but that same amount might trigger an audit if you are, say, a 3rd grade teacher.

I took the H&R Block course one year (I also have several college accounting courses) and they taught us to add nonrequired information to a return to head off potential audits.

Another thing about the IRS. Agents and auditors may be obnoxious, but they aren't stupid. If we are talking about fairly small amounts, you've made a good faith effort, but there are still a couple items in question, they will just deal with those items, and perhaps ask you to make changes.

This situation is not going to trigger a full audit. The IRS has no interest in undergoing the time and expense of doing an audit to recover an additional $200 in taxes.

Just cover all your bases. Report all of your income, talk to an accountant, add information to your return if you think it will help, and you'll probably be just fine.

[yahboohoo]

I don't think anyone really addressed the underlying issue raised by the OP. It seems he was suggesting that online regulation meant the amounts you were winning and losing could be fully disclosed to the gov't/IRS -- whether that data is daily, hourly, monthly, yearly, whatever... regardless of how you interpret or report your gambling winnings/losses today... and regardless of whether you think that system is fair or not.

The US government's terms for regulation certainly won't allow players to continue enjoying the degree of anonymity they do today. To some degree, the government will know who you are and what you are winning. If they want to define a 'session' as 'your seat at each table' they can. And under THEIR terms for regulations, if they want the data on that session, they can get it.

[Poker Clif]

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I don't think anyone really addressed the underlying issue raised by the OP. It seems he was suggesting that online regulation meant the amounts you were winning and losing could be fully disclosed to the gov't/IRS -- whether that data is daily, hourly, monthly, yearly, whatever... regardless of how you interpret or report your gambling winnings/losses today... and regardless of whether you think that system is fair or not.

The US government's terms for regulation certainly won't allow players to continue enjoying the degree of anonymity they do today. To some degree, the government will know who you are and what you are winning. If they want to define a 'session' as 'your seat at each table' they can. And under THEIR terms for regulations, if they want the data on that session, they can get it.

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I'm a tournament player, so I don't really think in terms of sessions. But if you have a well-designed spreadsheet, it's not hard to keep very detailed records, which should satisfy even the IRS.

I have separate spreadsheets for every different type of play: cash, SNG, MTT, etc. (I also have items just for my own beneift, such as aveage place in SNGs).

Every event is recorded. For example my sit-n-go spreadsheet has columns for the start time, end time, entry fee, amount won, and profit. The tournament ends, I go to my spreadsheet, and spend 10 seconds putting in those numbers.

Those numbers also go on a summary spreadsheet. The date goes on the left, and the columns could be, for example, SNG, MTT, cash, and miscellaneous (this is where you could put such things as bonuses). Then it's all there, a line showing what you did every day, with summary totals at the bottom.

I don't think the IRS is all that interested in your day-by-day results. But you could certainly summarize them by week or month, and explain that you have very detailed records going right down to the day and the event if they would like to see them.

My guess is that they wouldn't bother, but even if they did want to see more, and you produced it, in following years, they wouldn't give you any trouble, unless there was a major change (you became at instant millionaire at the WSOP).

As far as written documentation other than your spreadsheet, that isn't hard either. There are records online (such as hand histories) that can prove that you played when you say you did.

If you enter a live tournament, get a receipt for your entry fee, and keep your check stub if you cash. I have never played in a casino, but I suppose you could get someone there to sign sometime saying you were in there playing.

If they don't like how you figured it out, and they want you to make some changes, fine. Again, if you get good advice, make a good-faith effort, and keep good records, the ITS is not going to give you a hard time for a small amount of money. This really doesn't have to be a big deal.

[DeadMoneyDad]

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I don't think anyone really addressed the underlying issue raised by the OP. It seems he was suggesting that online regulation meant the amounts you were winning and losing could be fully disclosed to the gov't/IRS -- whether that data is daily, hourly, monthly, yearly, whatever... regardless of how you interpret or report your gambling winnings/losses today... and regardless of whether you think that system is fair or not.

The US government's terms for regulation certainly won't allow players to continue enjoying the degree of anonymity they do today. To some degree, the government will know who you are and what you are winning. If they want to define a 'session' as 'your seat at each table' they can. And under THEIR terms for regulations, if they want the data on that session, they can get it.

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It will have the effect if the IRS suddenly tried to introduce withholding taxes, on general income, in this day and age.

Given the IRS move to try to withhold MTT winnings, I would expect the issue of withholding of online withdraws of over $600.00 to be the least of our troubles.

Expect about what you get at a B&M under regulation or worse.

This time we will not have the B&M's pressure the gov't to ease off anything infavor of on-line poker.


D$D

[adanthar]

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Not really. They tried to get the gambling loss deduction eliminated a few years ago, calling a massive giveaway to the gambling industry.

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Incidentally, one of the reason behind this was the tacit acknowledgment that nobody actually did their taxes the prescribed way.

With poker being the new hot item and thousands of people making/declaring six figures, that has very likely changed now, though.

[permafrost]

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Tax law would have to be rewritten to make it fair or even worth regulating, otherwise regulation might just kill the industry itself.

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How so? Losses are deductible at the federal level, as was explained. If your state doesn't do this, I guess you'll have to work for change at that level. Besides, these taxes are owed under the current system....the only thing regulation will change is reporting by sites.

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From Barney's bill:
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Licensee...requirements with respect to any Internet bet or wager...all taxes relating to Internet gambling due to Federal and State governments...are collected at the time of any payment of any proceeds of Internet gambling

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After they collect taxes, sites will report; collecting and reporting will change.

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The time of collection (withholding) doesn't affect the amount owed.

No offense, but why do you post here?

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OP glossed over or doesn't know about the regulated sites having to withhold “at the time of any payment” on the $100k winnings; and just mentioned reporting. You know that the regulated site would need to collect tax money on the $100k, as well as report, but echoed his misinformation.

It is beside the point, but yes, the withholding has little to do with what you owe. However, keeping your money for several months instead of having it withheld (and likely over withheld if you have losses), has lots to do with your bottom line.

No offense, but this is not TheEnergizer’s forum yet, so why shouldn’t I post here?

[TheEngineer]

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No offense, but this is not TheEnergizer’s forum yet, so why shouldn’t I post here?

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You can post here all you want, obviously. I was just asking why you do.