I have filed as a professional for about 25 years. After about 10-12 years, someone at the IRS decided that I was under reporting my income. They insisted that the income I showed on Sched. C MUST exceed the total of my W-2G's. They also wanted to deny my ability to file as a professional. I sent them a copy of my gambling log showing all W-2G's and session results and a copy of the IRS Memorandom regarding the session reporting method. They still insisted and said they wished to proceed to Tax Court. I wrote another letter stating that I had filed in the same manner for many years, that I had no W-2 income during that time and that I had about 600 gambling sessions per year. I had very little other income. I asked them what filing method I should use. About a month before the Tax Court date, I actually received a phone call from the IRS. The stated they accepted my tax filing with no adjustments. I've never had a problem since.
The PDF of the IRS sessions memo can be found at: https://www.irs.gov/pub/irs-utl/am2008011.pdf
G'luck all,
Gamb00ler
BP bjbigplayer > wrote:
Jeffery,
Gamblers are already aware of what you are saying here except that W2-G's create specialized reporting issues in that if you don't report at least the sum of your W2-G's as Other Income any loss offset looks suspect and if you don't itemize and report less than the sum of your total W2-G's as income you're looking at a nasty letter from the IRS and a likely assessment by your state. Yes there is now a way to create session results from multiple W2's but the IRS is still having a tough time believing them and States an even worse time believing them..
Facts are, casual gamblers do not report their wins and most do not win anyway. Also facts are professional gamblers are not playing to beat the game, they're playing to beat casino marketing.
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Posted by: Derek Franks <gamb00ler@yahoo.com>
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