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Thread: Attention, Signers for Slot Winnings over $1,200

  1. #40
    Senior Member Aslan's Avatar
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    Quote Originally Posted by Tthree View Post
    The IRS can do whatever it wants. It is its own overseer.
    However...... T3, they are subject to judicial review. Even a biased court generally conducts itself within certain boundaries, and making income out of whole cloth, as Biggg is suggesting is not something a court would want a reputation for, not to mention, the court appeal process. But I am aware of atrocious things that IRS has done and gotten away with, and a journal is not a sure defense against this, but a journal does have some value, done well with attention to detail, along with other forms of evidence the IRS mentions in its guidance, and its a necessity for big time gamblers; you can believe that Billy Walters keeps a detailed journal and a file of receipts and other forms of documentation, but then, he's operating it as a business from beginning to end.

    It would be hard for an IRS decision of $510,000 to stand, however, if there is no evidence of actually possessing it or spending such a sum of money. WTF? If it does happen, you must bring lawyers and Congressmen into play and pray for the best. In gross miscarriages of justice, you need to pull out all the stops or you'll end up in jail or the poor house for doing absolutely nothing. The upside is that per capita it's extremely rare. You're more likely to drop a file cabinet on your foot IMO.

    Aslan 11/1/90 - 6/15/10 Stormy 1/22/95 - 8/23/10... “Life’s most urgent question is: what are you doing for others?” — Martin Luther King, Jr.

  2. #41


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    Quote Originally Posted by biggg View Post
    Can the IRS make up gross winnings and losses? For example suppose someone won 10000 one year (net income) and any reasonable audit would suggest that 10000 was an accurate number, and this was reported as income and taxes were paid. Can the IRS go back and say, "you played poker and we know you probably won 510000 and lost 500000 to win that 10000 so you should pay taxes as if this were true".
    Yes. There are several ways they can do this. They can look at what they think your cost of living was. They can look at what comparable businesses in your area earned (doubtful for professional gamblers). They can look at bank records. They can look at your assets. They can look at your net worth.
    The Cash Cow.

  3. #42


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    Quote Originally Posted by Tthree View Post
    The IRS can do whatever it wants. It is its own overseer.
    Yes. I've been involved in a bunch of audits, and auditors can generally do whatever they want. It is really difficult to overturn even blatantly incorrect actions of auditors. When you make your records, assume you will be defending an audit from a complete psycho. Most auditors are reasonable, but you need to protect yourself from the psychos.

    If you get a notice of deficiency, the burden of proof by preponderance of the evidence is on YOU as the taxpayer. I think overkill is well-advised, and +EV when dealing with tax collectors.
    The Cash Cow.

  4. #43
    Senior Member Aslan's Avatar
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    Quote Originally Posted by moo321 View Post
    Yes. There are several ways they can do this. They can look at what they think your cost of living was. They can look at what comparable businesses in your area earned (doubtful for professional gamblers). They can look at bank records. They can look at your assets. They can look at your net worth.
    First, the IRS has to know or suspect that you gambled.

    The average person who gambled during the year does not file his wins and losses from casino visits, office pools, football cards, sports bets, home poker games, etc. The vast majority of these people lost money overall and probably none of these kept a journal. Their risk of IRS audit is next to nothing. Also, their paychecks, bank accounts, and purchase records testify to the fact that they received no windfalls during the year, not that they would ever be called upon to show these.

    Keeping either a journal or other adequate documentation, or both, is essential to anyone gambling as a business, as good record keeping is essential to any business enterprise.

    Aslan 11/1/90 - 6/15/10 Stormy 1/22/95 - 8/23/10... “Life’s most urgent question is: what are you doing for others?” — Martin Luther King, Jr.

  5. #44
    Senior Member Aslan's Avatar
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    Quote Originally Posted by moo321 View Post
    Yes. I've been involved in a bunch of audits, and auditors can generally do whatever they want. It is really difficult to overturn even blatantly incorrect actions of auditors. When you make your records, assume you will be defending an audit from a complete psycho. Most auditors are reasonable, but you need to protect yourself from the psychos.

    If you get a notice of deficiency, the burden of proof by preponderance of the evidence is on YOU as the taxpayer. I think overkill is well-advised, and +EV when dealing with tax collectors.
    Those who file gambling winnings/losses are always at risk for IRS scrutiny. A journal is an affidavit of your gambling wins and losses, but it is easy to falsify, and the "psychos" you mentioned might not accept your word for it. The best evidence is receipts, bank accounts, documented income sources, and other things that cannot be falsified. The two together, your journal and any hard evidence you possess, give you the best documentation possible. If there is big money involved, you are tempting fate not to have it. Losses are hard to document, and even though a win/loss statement says, "Not for taxation purposes," it still constitutes a level of evidence and I have been successful in using it. After all, the IRS will use it against you for documenting wins, which speaks to its benefit for you, as well, in documenting losses.

    Aslan 11/1/90 - 6/15/10 Stormy 1/22/95 - 8/23/10... “Life’s most urgent question is: what are you doing for others?” — Martin Luther King, Jr.

  6. #45


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    Quote Originally Posted by Aslan View Post
    First, the IRS has to know or suspect that you gambled.

    The average person who gambled during the year does not file his wins and losses from casino visits, office pools, football cards, sports bets, home poker games, etc. The vast majority of these people lost money overall and probably none of these kept a journal. Their risk of IRS audit is next to nothing. Also, their paychecks, bank accounts, and purchase records testify to the fact that they received no windfalls during the year, not that they would ever be called upon to show these.

    Keeping either a journal or other adequate documentation, or both, is essential to anyone gambling as a business, as good record keeping is essential to any business enterprise.
    I can agree with everything you said here. Most gamblers don't pay taxes unless they hit a slot jackpot. But if you're gambling for a profit and/or for a significant amount of money, you should be keeping a log to protect yourself.
    The Cash Cow.

  7. #46


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    Quote Originally Posted by Aslan View Post
    First, the IRS has to know or suspect that you gambled.

    The average person who gambled during the year does not file his wins and losses from casino visits, office pools, football cards, sports bets, home poker games, etc. The vast majority of these people lost money overall and probably none of these kept a journal. Their risk of IRS audit is next to nothing. Also, their paychecks, bank accounts, and purchase records testify to the fact that they received no windfalls during the year, not that they would ever be called upon to show these.

    Keeping either a journal or other adequate documentation, or both, is essential to anyone gambling as a business, as good record keeping is essential to any business enterprise.
    Also winning a blackjack tournament can get you on the IRS radar if you receive a Form 1099.

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