Big-time loser fights IRS and wins

[EasyRhino]

The take-home from this story is that the IRS might be a little more lax about requiring logs of gambling activity to support gaming wins/losses. (But they're still a very good idea).

The agent of change for this, though, is a fairly interesting but tragic lotto winner who becomes hopelessly addicted to slots:

http://www.utsandiego.com/uniontrib/20080316/news_1n16frank.html

 

[aslan]

The take-home from this story is that the IRS might be a little more lax about requiring logs of gambling activity to support gaming wins/losses. (But they're still a very good idea).

The agent of change for this, though, is a fairly interesting but tragic lotto winner who becomes hopelessly addicted to slots:

http://www.utsandiego.com/uniontrib/20080316/news_1n16frank.html

Chalk one up for the good guys.

A log is a good idea but I for one don't have the discipline. I have been relying on casino records of my wins and losses. But I know that they are not the last word. For example, what if I won $20,000 at one casino and lost $8,000 at another. If the IRS had a record of several VP slot jackpots, totalling say, $6,000, I would simply claim my $8,000 loss to offset my jackpot winnings. That works so far. But what if the IRS became aware of my $20,000 in winnings. Currently, I don't think they have a way of finding out in a case where no IRS filing was required. But my fear is that IRS will find a way to look at casino win/loss statements of its customers. They're out there, and if the IRS doesn't have authority to look at them now (or do they?), you know they will continue to try to find a way.

 

[EasyRhino]

A log is a good idea but I for one don't have the discipline. I have been relying on casino records of my wins and losses.

I started keeping one on Jan 1, and cannot recommend it highly enough. First, it helps put your sessions in perspective. It also gives you an easy place to put in notes about dealers and PCs.

Most importantly, win/loss statements aren't accurate, even if you're NOT ratholing. And if you are, they should be inaccurate, by definition. Your log is going to be the most reliable source in existence if you ever need to recreate your results.

It also helps against questions of "where did all that money go?"

I keep a tiny little notebook handy that I can jot down notes in after a session, then type it up in a spreadsheet when I get the chance.

 

[aslan]

I started keeping one on Jan 1, and cannot recommend it highly enough. First, it helps put your sessions in perspective. It also gives you an easy place to put in notes about dealers and PCs.

Most importantly, win/loss statements aren't accurate, even if you're NOT ratholing. And if you are, they should be inaccurate, by definition. Your log is going to be the most reliable source in existence if you ever need to recreate your results.

It also helps against questions of "where did all that money go?"

I keep a tiny little notebook handy that I can jot down notes in after a session, then type it up in a spreadsheet when I get the chance.

There's no doubt that a log is a great thing for your own personal use.

The only problem with a real record is that if you are winning substantially more than losing overall, it will be useless to you in justifying to the IRS the offset of losses against winnings, since you won't show enough losses to cover your winnings, and you will be revealing winnings they didn't even know about. You could, of course, keep two sets of books. I think Al Capone tried that. lol Just kidding. But that's the dilemma. I assume most gamblers show only enough losses to cover their "reported" winnings. They don't want the IRS to know their true winnings.

 

[EasyRhino]

I assume most gamblers show only enough losses to cover their "reported" winnings.

Most gamblers lose, and therefore have no problem producing losses equal to or greater than their winnings.

 

[aslan]

Most gamblers lose, and therefore have no problem producing losses equal to or greater than their winnings.

Sad, but true. But not you, Easy! Not you!

 

[shadroch]

The first time I was called in for a sales tax audit,I was terrified and let the agent set the agenda. I was so afraid that I gladly agreed to whatever numbers he came up with. It ended up with me paying almost 95% of what I really owed them. The next time,I was more confrontational and rejected their numbers outright.This time they settled. For about half their original number and a third of what I really owed.
Things to remember when going to a tax audit of any kind
1) You will be meeting a junior agent.
2) He is judged on productivity,he wants to finish up as quick as possible.Time is on your side,not his
3) Confrontational is okay,antagonistic is bad.Don't piss him off.Don't make it personal.You want to walk out with him thinking he won.Key word being thinking.

 

[Doofus]

The first time I was called in for a sales tax audit,I was terrified and let the agent set the agenda. I was so afraid that I gladly agreed to whatever numbers he came up with. It ended up with me paying almost 95% of what I really owed them. The next time,I was more confrontational and rejected their numbers outright.This time they settled. For about half their original number and a third of what I really owed.
Things to remember when going to a tax audit of any kind
1) You will be meeting a junior agent.
2) He is judged on productivity,he wants to finish up as quick as possible.Time is on your side,not his
3) Confrontational is okay,antagonistic is bad.Don't piss him off.Don't make it personal.You want to walk out with him thinking he won.Key word being thinking.

I could never imagine going alone to one of these things. Every tax pro I know would likely advise sending in your CPA or tax attorney to negotiate on your behalf. Unless the case was reasonably simple; of course in that case it would be a paper inquiry by mail.

 

[shadroch]

Big mistake. If your CPA could negotiate,he'd be pushing real estate or representing rock stars.If your tax attorney could make convincing aurguments,he'd be a trial attorney.