[Faceman14]

I have been studying gambling tax issues on this forum and others for years, and also interviewing the few professional gamblers I know personally. Here is the basic conclusion I have come to. Please offer any thoughts and critiques on the issue.

#1- Claim the total of all checks deposited from offshore books, and any other IRS receipts you recieved for the year. Example: In 2010 I have withdrawn $1,500 each month from Bodog and deposited the checks into my US checking account. My total for 2010 gambling winnings that I will claim is $18,000.

#2- After each check from Bodog clears in my US checking account, withdrawl all the cash. Once a month go to the local racetrack and grab losing tickets totaling around $1,500. Then on my 2010 taxes claim $18,000 in losses, for a total profit of $0. Thus paying no tax.

#3- If ever autited, state that you play free online poker all the time and have won a few big tournaments. The money you withdrawl is your fun money to use at the racetrack. Thus, you are not gambling illegally because it is legal to win money on free poker tournaments. And you don't owe any taxes because you lost it all at the racetrack.

Can the IRS touch us?

[Hareeba!]

I have been studying gambling tax issues on this forum and others for years, and also interviewing the few professional gamblers I know personally. Here is the basic conclusion I have come to. Please offer any thoughts and critiques on the issue.

#1- Claim the total of all checks deposited from offshore books, and any other IRS receipts you recieved for the year. Example: In 2010 I have withdrawn $1,500 each month from Bodog and deposited the checks into my US checking account. My total for 2010 gambling winnings that I will claim is $18,000.

#2- After each check from Bodog clears in my US checking account, withdrawl all the cash. Once a month go to the local racetrack and grab losing tickets totaling around $1,500. Then on my 2010 taxes claim $18,000 in losses, for a total profit of $0. Thus paying no tax.

#3- If ever autited, state that you play free online poker all the time and have won a few big tournaments. The money you withdrawl is your fun money to use at the racetrack. Thus, you are not gambling illegally because it is legal to win money on free poker tournaments. And you don't owe any taxes because you lost it all at the racetrack.

Can the IRS touch us?

I would hope so

[sq764]

is this a seriousl thread?

[stikymess]

1 quick point the IRS does't care to see tickets, they want a log, or ledger with wagers, dates and times.

Best to see a tax attorney even though you can see 10 and get 10 different answers. not sure trying to cancel out profits is the greatest of ideas.

[Pokerjoe]

I have been studying gambling tax issues on this forum and others for years, and also interviewing the few professional gamblers I know personally. Here is the basic conclusion I have come to. Please offer any thoughts and critiques on the issue.

#1- Claim the total of all checks deposited from offshore books, and any other IRS receipts you recieved for the year. Example: In 2010 I have withdrawn $1,500 each month from Bodog and deposited the checks into my US checking account. My total for 2010 gambling winnings that I will claim is $18,000.

#2- After each check from Bodog clears in my US checking account, withdrawl all the cash. Once a month go to the local racetrack and grab losing tickets totaling around $1,500. Then on my 2010 taxes claim $18,000 in losses, for a total profit of $0. Thus paying no tax.

#3- If ever autited, state that you play free online poker all the time and have won a few big tournaments. The money you withdrawl is your fun money to use at the racetrack. Thus, you are not gambling illegally because it is legal to win money on free poker tournaments. And you don't owe any taxes because you lost it all at the racetrack.

Can the IRS touch us?

You are an audit-fail waiting to happen.

[John Dough]

You should be reporting/recording daily wins and losses. What you actually deposit into a bank has nothing to do with it. If you net 50K, deposit 30K in your bank, but leave 20K of it offshore, you should report a profit of 50K.

You wanna try to commit tax evasion, go for it, not exactly my cup of tea though.

[username474]

In most states this will work fine. There are some states where you can not write off all of your losses against your wins, i.e. CT and a few others. It is worth it to talk to your accountant about. As for record keeping you should be keeping a ledger with all records, false or not with the losing tickets as a back up. If audited never admit to having over 10k in your sports book account in the calendar year. It's only tax evasion if they can prove it. F&*k'em.

[csm506]

GL with that but do not advertise this on-line as I hear that IRS agents look at this site from time to time. Be careful

[Faceman14]

You should be reporting/recording daily wins and losses. What you actually deposit into a bank has nothing to do with it. If you net 50K, deposit 30K in your bank, but leave 20K of it offshore, you should report a profit of 50K. You wanna try to commit tax evasion, go for it, not exactly my cup of tea though.

I cannot fathom that you guys would claim a profit of 50K and pay taxes on money that you have not even received from an offshore account. What if you never get the money? What if the sportsbook screws you over? It makes no sense to claim money you haven't even received. I bet less than 1% of winning online gamblers do this. The IRS only sees the money you have actually deposited into your bank account.

[John Dough]

I cannot fathom that you guys would claim a profit of 50K and pay taxes on money that you have not even received from an offshore account. What if you never get the money? What if the sportsbook screws you over? It makes no sense to claim money you haven't even received. I bet less than 1% of winning online gamblers do this. The IRS only sees the money you have actually deposited into your bank account.

I'll take my chances with getting stiffed over choosing to commit tax evasion since sports betting is my profession and I've been doing this for a long time. Others are obviously free to do whatever they choose. I'm personally not interested in how 99% of winning gamblers report their taxes.

It may not make sense to you, but that's how the IRS requires you to report winnings.

[Hareeba!]

I cannot fathom that you guys would claim a profit of 50K and pay taxes on money that you have not even received from an offshore account. What if you never get the money? What if the sportsbook screws you over? It makes no sense to claim money you haven't even received. I bet less than 1% of winning online gamblers do this. The IRS only sees the money you have actually deposited into your bank account.

When and if you get screwed, then you have a loss to claim
Otherwise winners just withdraw and pay what and when they chose
Surely the IRS has the power to demand evidence, such as your online book activity, rather than simply rely on what they "see"?

[Faceman14]

I'll take my chances with getting stiffed over choosing to commit tax evasion since sports betting is my profession and I've been doing this for a long time. Others are obviously free to do whatever they choose. I'm personally not interested in how 99% of winning gamblers report their taxes. It may not make sense to you, but that's how the IRS requires you to report winnings.

That makes sense. I stand corrected. In which case, is there a simple way to record all of your wins/losses in a way that will satisfy the IRS if you get autided. If I make several thousand prop bets over the course of a year, do I need to write out every single wager? or can I just have a monetary won/lost column for each day?

[Hareeba!]

That makes sense. I stand corrected. In which case, is there a simple way to record all of your wins/losses in a way that will satisfy the IRS if you get autided. If I make several thousand prop bets over the course of a year, do I need to write out every single wager? or can I just have a monetary won/lost column for each day?

All serious punters should maintain a database of every bet for themselves regardless of tax issues.

That ought to be adequate for tax purposes too providing it includes the books at witch the bets are made.

[username474]

That makes sense. I stand corrected. In which case, is there a simple way to record all of your wins/losses in a way that will satisfy the IRS if you get autided. If I make several thousand prop bets over the course of a year, do I need to write out every single wager? or can I just have a monetary won/lost column for each day?

They want you to write out every bet made. They also want you to list the book you placed the wager with and the time of the game.

[JoeVig]

If I make several thousand prop bets over the course of a year, do I need to write out every single wager?

If you want to satisfy the IRS, yes.

[Faceman14]

Is the issue of online gambling an issue at all? It surprises me that the IRS will sit down and analyze your wagers, deposits, and withdrawls, through offshore gambling accounts. And of course, checks deposited into US accounts. Is online gambling an issue?

[Hareeba!]

Is the issue of online gambling an issue at all? It surprises me that the IRS will sit down and analyze your wagers, deposits, and withdrawls, through offshore gambling accounts. And of course, checks deposited into US accounts. Is online gambling an issue?

no more or less than any other source of income
if you are being investigated they can look into everything you touch
the onus on you is to prove what you are claiming

[John Dough]

Solid last few posts from Hareeba IMO. Also nice to see the OP is actually listening to the responses when people are trying to help. Sadly, that's a rare thing in forum-land.

[DukeJohn]

If you talked to professional sports bettors then you would know you can also deduct all expenses as any business. For example, this cup of coffee I am drinking right now is part of office supplies. However, since you are not going to be claiming professional sports bettor or gambler or apparently not even going to make a company out of what you do. For example, start a website and then claim your income from selling picks, which would be true if you word it right and squint your eyes. Let me tell you, the right wording makes all the difference, which is why it is best to use a tax attorney, however if you study you can make pretty sure you don't screw up if you have to talk with the IRS.

Your best bet in this scenario is to do what you say and always use TurboTax and then pay the $25 for tax defense for your own piece of mind. As soon as the IRS contacts you, if they do, just say you have representation and give them the Tax Defense number.

BoL,