Home > Gambling, IRS > Brief Re-Introduction

Brief Re-Introduction

Me quoting me:

Consider this true story.  In 2005, player X finished fifth at the World Poker Tour’s Jack Binion World Poker Open and won the WPT’s L.A. Poker Classic less than a month later.  These two finishes alone earned player X over $2 mil.  In fact, player X has more than $7 mil in tournament earnings in his career.  Fast-forward to this year.  In May, the IRS filed a tax lien against player X to collect on $339,000 of back taxes owed from 2005 to 2007 (a lien essentially gives the IRS a superior right to the equity in player X’s properties to collect on the back taxes).  This lien resulted in two foreclosed homes and a very big headache for him and his family.  With proper guidance and smart planning, player X could have put some of his earnings aside to keep current with tax obligations and not have to face these consequences.

Today’s Takeaway:  Gambling winnings are taxable.  You are required by federal and state laws to report these earnings and pay the associated taxes.

Unfortunately, I see situations similar to player X’s too often.  Each time I find myself thinking, where did this client go wrong?  Sometimes the client consciously tries to cheat the government.  Sometimes it’s indifference.  Sometimes it’s lack of knowledge.

With this blog, I will make weekly posts highlighting a point or two the casual or full-time poker player should be aware of.  The law pertaining to poker is cloudy and complex, and the taxation of poker earnings is no exception.  Considering there are players all over the globe, the rules simply are not the same for each player, as each country’s tax system is different.  By giving each of these issues some attention, however, I am confident the picture as it applies to each reader will become much clearer.

For those of you who have been reading my blog over at Deucescracked, I thank you for making the jump to my newly enhanced blog.

This is my first original post on this blog.  To newcomers, all previous posts here were originally posted on my old blog.  I incorporated them here in order to make the transition as smooth as possible.

I must note that there are some great comments to these posts in the old blog.  If you find a previous post particularly interesting, I suggest checking it out on my old blog for the comments.

taxdood welcomes you, and is looking forward to future discussions.  The focus will continue to be principally on the taxation of gambling winnings, but I plan to expand the blog’s scope to other topics as I see fit.

Have a Happy New Year!

Categories: Gambling, IRS
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