IRS Audit

[Barretboy]

Let me say this again. There is no way for the IRS to know your poker transactions, they don't have access to your neteller/poker account, or even your bank account for that matter. HOWEVER, that being said, if they see something that they find 'suspicious' on your return (They have something like 105 'red flags' that can pop up', you stand a chance of being audited. Depsite what someone said earlier, it doesn't matter how much you make, you can be audited.

To be ready for an audit, the best and really only thing you can do is to keep good documentation of large transactions made (typically purchases over 500 dollars or 1-2% of your yearly income). By keeping good documentation, you can ensure that you wont have to pay any fines or backtaxes (that you do not acutally owe).

Again, the IRS only really examines 1 out of every 50 returns (they don't have the time/manpower to check every return) and an even smaller number of those are audited. MAKE SURE YOU FILL OUT A FORM 1040, AND THE SCHEDULE C ATTACHMENT IF YOU HAVE GAMBLING WINNINGS. There's no reason to worry if you haven't cheated on your taxes. But if you have, you're pretty much asking to get audited, and slammed with fines.

[DING-DONG YO]

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I'm curious as to what people think over the use of the Neteller Debit Card? I try to never let anything from my poker winnings ever touch a legit bank account that is in my name. I take out my poker winnings 1k at a time via neteller debit card (losing $4 per 1k to do this). I don't make any large purchases that would seem suspicious. I mostly pay for things in cash but it is almost always in small quantities. I have a normal day job and that is the only income i intend to file with the IRS. Does anyone see this as being a risky sort of behavior? I'm not making a ton of money (def not over 50K+). I've only been playing online for a few short months but I've made a reasonably good amount. Any opinions?

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The neteller Dr card has been discussed ad nauseum in the zoo and legislation. It is NOT a way to keep your winnings out of the US banking system. The transactions are still processed by a US bank and your name is attached to the transaction. It provides no more anonymity than making neteller withdrawls to your US bank account. And 50K in untaxed income is a lot.

[yellowsub]

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no, you're fine. the tax laws say that money has to arrive in your checking account before it can be classified as "income."

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I did not know this was true.

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that's because it isn't.

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QFT, plz dont give tax advice when u have no idea wtf yer talking about. PPl actually might listen/

[BigBuffet]

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To be ready for an audit, the best and really only thing you can do is to keep good documentation...Again, the IRS only really examines 1 out of every 50 returns (they don't have the time/manpower to check every return) and an even smaller number of those are audited. MAKE SURE YOU FILL OUT A FORM 1040, AND THE SCHEDULE C ATTACHMENT IF YOU HAVE GAMBLING WINNINGS.

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Good post. Some thoughts I'd like to add:

1) The IRS has been increasing the number of auditors over the years. As routine processing has become increasingly automated, people in those areas have been transferred and retrained. So expect more future audits.

2) Receipts, printouts, statements, excel spreadsheets you create will help you.

3) Any new "big" activity will eventually draw audit crosshairs. I was audited in '02 for '99 stock trades. Passed with flying colors. Some of you will eventualy be invited to stop into your local IRS field office for your '02-'04 online poker activity, assuming you reported. And if you didn't and they have some kind of flag... [img]/images/graemlins/blush.gif[/img]

4) Schedule C is for those who can make a basis for professional (full-time) gambling status. If you can't then you will use Schedule A. Make sure you know what you are doing regarding which Schedule to use.

[HiddenOuts]

So if we're a pro poker player and that's our main source of income then we're supposed to file quarterlies?

God I really need a CPA ASAP! [img]/images/graemlins/confused.gif[/img]

[Barretboy]

Maybe there's a business here...Might be something to think about for all the other CPAs on here.

[otnemem]

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Wow, if you're [censored] dumb enough to think that the people you see on COPS represent a good sample of the people in the United States, please stay in Europe. You might be able to sum up the south that way, but travel to the coasts and America is NOT like that...

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Have you ever actually been to or spent any time in the south or just regurgitating what YOU saw on cops?

And I want an answer to this question. Explain yourself if you're going to call someone out for over-generalizing Americans and then DO THE EXACT SAME THING YOURSELF about a region of the country.

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I was born in Virginia and lived for five years of my adult life in West Virginia. I would say 90% of the people I met there were nearly subhuman in every regard. My sister lives in Richmond, and there are some concrete-walkers there. Don't get me wrong, some of the populated areas of the south are okay...

[DING-DONG YO]

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Maybe there's already a business here...Might be something to think about for all the other CPAs on here.

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[otnemem]

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Wow, if you're [censored] dumb enough to think that the people you see on COPS represent a good sample of the people in the United States...You might be able to sum up the south that way...

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lol, please stay on whore island

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Lol I will.

[Barretboy]

People in Virginia would take offense to comparing them to people in West Virginia. Maybe it's my Hokie blood coming through there, but I've never met a person from West Virginia that I liked.