Not only could you trigger an audit by the IRS by reporting gambling income, you might find the DOJ knocking at your door, investigating which companies were illegally transferring funds to sportsbooks for you, possibly shutting down your funding options.
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If you are audited, they look at all of your bank statements. If you cannot account for every major deposit, you're fukked. And no, the DOJ does not interrogate individual gamblers. They are well aware of who the sportsbooks are, but they have no jurisdiction to shut them down.Comment -
i mean all my deposits and withdrawals occur in my uk bank account not my US one. in theory i could potentially keep quiet all together as there's no reason at all for that account to be flagged up or looked at. Its registered to a uk address.
But i do want to report my income, i just don't want too get my pants pulled down unfairly. Im really just trying to find out the rules on session reporting for sports betting and what other people here do.Comment -
appreciate the response. Will probably end up doing that, but just curious if anyone has any more knowledge or experience of the session method for sports betting?Comment -
Ok, I don't know much about US tax laws but surely there has to be a more sensible way of dealing with this?
My view would be that "session" accounting is really only appropriate for casino style betting. Clearly that sort of accounting is permitting the deduction of losing bets in determining the session outcome.
So why should that not also be permissible for sports betting? I'd be quite amazed if the law differentiates.
The way I'd be looking at it is to regard all your bets on each event as a single entity. So when doing matched betting, account for only the net result for each game, which typically would be only a very small win or loss.
That then leaves you to determine the profits you derive from the free bets you've generated.
I'm guessing that you most probably hedge/arb those and thus have a winning and a losing transaction there too? I'd simply account for the net gain on those transactions rather than recording a gross win and a loss.
I'd be surprised if any taxing authority would find that approach to be inappropriate.Comment -
My posts have pretty much been assuming an audit this whole time, even in front of the courts.
If you try some type of session betting it might be ok, but it might not. You will still have to keep track of all your wagers each session. If you report your session totals, but the IRS decides it's advantageous to them to itemize the individual losses, that's what you will get.
Sports is different and you'd better record every single win and every single loss and prove the trades.
If you say you've lost in a session, you will still need the individual tickets, or the IRS could deny those losses. Then they get to add up the numbers themselves...you will get the short end of the stick.
We've already been over a need for a professional but know that multiple opinions are wise there as well. I've stated a few codes and your professional will likely explore those first.
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I would suggest recording winnings and paying taxes if your wins are substantial i.e. six figures. Reason being, you'll want to use some of the cash on things with paper trail like a house or stock, etc...Comment
