Money made online but spent outside USA??

[GittyUP]

I was wondering the legality of making money playing poker and then spending the money on travelling abroad. Obviously the money spent abroad would have to take the form of cash or most likely travelers checks/prepaid credit cards. Is this a loop hole for avoiding taxes?

The loophole I am sort of looking at is can making money online even while in the US be considering US income even if the money is not spent/traced in the US financial sphere?

Lets say I get a check from a site for $3000. Now depositing that in my checking account would not be a very good idea but lets say I knew of someone who would cash the check for me or a business that would (not sure if it matters here but If so please say something). I now have $3000 cash to go travelling with. Would the US govt ever trace the fact that my friend cashed my check for me or a business cashed my check? Could I buy travellers checks with this money and it be untraceble? prepaid credit cards? Would it matter if the check was for $15,000?

I understand that these concerns onlt apply if I get audited but I am thinking of taking 10 or 15k and travelling a year and dont want to pay taxes on this portion of my poker income. If it matters I am only 23 and dont really hold a steady job outside poker.

[WhiteWolf]

You're basically asking if it's OK to commit tax evasion, so long as you don't get caught. If you're a US citizen, living in the US, you owe taxes on all gambling winnings. It doesn't matter if, when, or where you withdraw/spend those winnings.

[MiltonFriedman]

"Is this a loop hole for avoiding taxes? "

No. That is evading taxes, which is different than avoiding taxes.

If you are serious about reloacating for a year offshore, you might consider that income earned outside the US is likely eligible for an Exemption from US taxes, up to $82,000 of income.

Relocate and establish your residence (abroad for a calendar year, then earn the money during that calendar year. That may be permissble avoiding of taxes. Earning the money while in the US and scheming to not pay taxes on it is illegal tax evasion.

See a CPA.

[NickMPK]

[ QUOTE ]
I was wondering the legality of making money playing poker and then spending the money on travelling abroad. Obviously the money spent abroad would have to take the form of cash or most likely travelers checks/prepaid credit cards. Is this a loop hole for avoiding taxes?

The loophole I am sort of looking at is can making money online even while in the US be considering US income even if the money is not spent/traced in the US financial sphere?


[/ QUOTE ]

Are you asking if it is legal to neglect to report income just because you never deposit in a checking account?
Or are you asking if there is a specific deduction allowed for foreign travel?

The answer to the first question is obviously no. The answer to the second is generally no, but if you are a professional player you might be able to claim some travel costs as business expenses if you are traveling to a poker tournament.

But is sounds like you aren't "wonder about the legality" of this....you are asking what they chances are that you will get caught if you break the law. I can't imagine you sincerely thought this might be legal.

[cardcounter0]

Yes, this is the secret pay no taxes plan. This is why Bill Gates takes all the money he makes at Microsoft and spends it abroad.

[astrodon]

I suppose while evading your OBLIGATION to pay taxes, you would use Federal Highways to travel on; and if abroad and got into a scrape you would want to find refuge in a US Embassy; and when you inevitably and eventually become aged and or infirmed you would want SSI benefits as well.

Sounds like a deadbeat to me. [img]/images/graemlins/mad.gif[/img]

[amulet]

if you are a us citizen wherever and however you make money ANYWHERE in the world you owe taxes, regardless of the money ever entering the us. not to declare it is tax fraud.

[AP0CALYP5E]

[ QUOTE ]
I suppose while evading your OBLIGATION to pay taxes, you would use Federal Highways to travel on; and if abroad and got into a scrape you would want to find refuge in a US Embassy; and when you inevitably and eventually become aged and or infirmed you would want SSI benefits as well.

Sounds like a deadbeat to me. [img]/images/graemlins/mad.gif[/img]

[/ QUOTE ]

Better than living on welfare which is worse than avoiding taxes.