Re: [vpFREE] Stimulus check

 

There is no where in the tax code that mandates W2-Gs be added up and reported; the tax code mandates that all wins be reported. While I started gambling in 1986, I did not start generating significant amounts of W2-Gs until 2008, and because of that, I started using the session method that year (and have every year since then). My session wins are always considerably less than the sum of my W2-Gs.

I keep detailed contemporaneous records - and yes, it can be a pain in the butt. On the upside, it forces me to "face reality" as to wins and losses. It is all too easy to only remember the great days and fool ourselves into believing we lose much less than we really do. A "session" for me starts from the moment I start playing and ends when I quit for the day. If I go to more than one casino in a day, that is another session. I record and claim ALL wins - whether it was a $5 win or a $20k win. While I do track all W2-Gs, that total for the year is not reflected anywhere on my 1040.

In those 11 years, I have been audited twice. The envelopes the audits came in were thick - about 20 pages or so. Besides the "love letter" included, there were pages and pages listing every W2-G I had received for the year - and they of course, let me know that my "wins" claimed did not add up to the W2-Gs they had received from the casinos. The part that I found quite surprising, was that on both audits, they were missing W2-Gs!  I actually had more than they listed. In both audits, I pointed out their errors - telling them they were missing W2-Gs. Both audits required 3 responses from me before they "saw the light" and closed the audits, accepting my explanations and letting me know I owed -0-.

I am not afraid of the IRS - I am honest and keep very good records - but I can assure you that if you are audited it will take a great deal of your time addressing it. I am certain I spent at least 20 hours each time gathering up the information I needed to send them and then writing and rewriting responses. And it is frustrating that you have 30 days to respond, but they have 60 days to respond to you.

Correna

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RE: [vpFREE] Stimulus check

 

The red flags for audits are publicized and can be researched by the taxpayer.  I'm not a tax lawyer so I don't give tax advice but they can look them up themselves and make their own decisions. 

 

 

Lakeshore Law Center

Jeffrey Wilens, Esq.

18340 Yorba Linda Blvd.

No. 107-610

Yorba Linda, CA 92886

714-854-7205

714-854-7206 (fax)

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From: vpFREE@yahoogroups.com <vpFREE@yahoogroups.com>
Sent: Wednesday, April 22, 2020 5:27 PM
To: vpFREE@yahoogroups.com
Subject: Re: [vpFREE] Stimulus check

 

 

Just curious ... have you dispensed the tax advice to clients that they might reasonably expect to avoid detection when omitting gross income revenue from their tax return?

 

 

-----Original Message-----
From: Jeffrey Wilens jeff@lakeshorelaw.org [vpFREE] <vpFREE@yahoogroups.com>
To: vpFREE@yahoogroups.com <vpFREE@yahoogroups.com>
Sent: Wed, Apr 22, 2020 7:09 pm
Subject: RE: [vpFREE] Stimulus check

 

Less than 1% of returns and even then they rely heaving on AI to identify problems.  For example, you claim $40,000 in business income but you have a property tax deduction that is consistent with a $1.5 million dollar house. Obviously any discrepancies between 1099's and reported income can be detected by the AI as well.  Apart from that, they are looking for very high income people for the most part, especially business owners.

 

 

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Re: [vpFREE] Stimulus check

 

Just curious ... have you dispensed the tax advice to clients that they might reasonably expect to avoid detection when omitting gross income revenue from their tax return?


-----Original Message-----
From: Jeffrey Wilens jeff@lakeshorelaw.org [vpFREE] <vpFREE@yahoogroups.com>
To: vpFREE@yahoogroups.com <vpFREE@yahoogroups.com>
Sent: Wed, Apr 22, 2020 7:09 pm
Subject: RE: [vpFREE] Stimulus check



Less than 1% of returns and even then they rely heaving on AI to identify problems.  For example, you claim $40,000 in business income but you have a property tax deduction that is consistent with a $1.5 million dollar house. Obviously any discrepancies between 1099's and reported income can be detected by the AI as well.  Apart from that, they are looking for very high income people for the most part, especially business owners.
 
 

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Re: [vpFREE] Stimulus check

 

Now I know why most everyone seems to text faster than me ...    ;)


-----Original Message-----
From: BP bjbigplayer@gmail.com [vpFREE] <vpFREE@yahoogroups.com>
To: vpFREE@yahoogroups.com
Sent: Wed, Apr 22, 2020 5:45 pm
Subject: Re: [vpFREE] Stimulus check



My apologies for the lack of punctuation.  I text all day and use almost none. 

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Re: [vpFREE] Stimulus check

 

Now, where's the anecdote of the gambler who replied to that letter by stating, "I lost it", to which the IRS responds "negligence doesn't relieve tax liability"??


-----Original Message-----
From: BP bjbigplayer@gmail.com [vpFREE] <vpFREE@yahoogroups.com>
To: vpFREE@yahoogroups.com
Sent: Wed, Apr 22, 2020 5:43 pm
Subject: Re: [vpFREE] Stimulus check



Report less than the sum of your W2-Gs as other income if you don't file Sch C and that is a red flag that usually results in a letter audit.  IRS still assumes, despite new rules allowing session reporting, that your Gross Session Wins must not be less than the sum of your W2-Gs.  If you have $50,900 in W2-Gs and report $15,000 in Other Income on Form 1040 the IRS wants to know where the rest of your win is. 

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Re: [vpFREE] Stimulus check

 

Glen,

It's worth noting that while Treasury was unwilling to increase the reporting thresholds when reviewing rules in 2017, the did propose the concession that casinos could elect to report net wins on any gaming day in which those net wins exceeded the $1200 threshold.

If implemented, it wouldn't have eliminated current reporting headaches for gamblers entirely, but it would have been a considerable assist for many $5+ players who now must gross up AGI by quad hits on "double bonus" like games (or $10 jacks players). 

However, casino owners balked at gaming day reporting, saying that current tech couldn't assure who was actually playing (as anyone who has picked up an abandoned card in a casino will attest) and thus exposed them to potentially inaccurately attributing wins to the wrong person.

The truth is that the processing of w2-g's is largely a minor expense to the casino, particularly now that tech has streamlined much of it.  The cost isn't worth making waves over.  Any there's no one lobbying for the player, least of all casinos.  (If it weren't that big casinos players are a bunch of skinflints ;), I'd have long ago suggested we form a PAC in order to register a "voice" in DC -- we live in a "dollar democracy")


-----Original Message-----
From: Glen Gronseth gleng4444@gmail.com [vpFREE] <vpFREE@yahoogroups.com>
To: vpFREE@yahoogroups.com
Sent: Wed, Apr 22, 2020 5:01 pm
Subject: Re: [vpFREE] Stimulus check


I've long wondered why the American Gaming Association https://www.americangaming.org/  has never turned its lobbyists loose on the law that requires a W2-G to be issued for wins of $1,200 or higher.  It  would make only a tiny dent in federal and state tax receipts, simplify casinos' bookkeeping, and connect the tax laws to common sense ...

Or, if Congress can't be that reasonable, at least increase the W2-G threshhold to a much higher amount.  It's been $1,200 for as long as I can remember.  $1,200 in 1980 had the same purchasing power as $3,759 today.  A $5,000 threshhold would suit this former $1 VP player but many people who have large actual net losses would need a higher threshhold to escape governmental abuse. 

GMan.


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RE: [vpFREE] Stimulus check

 

Less than 1% of returns and even then they rely heaving on AI to identify problems.  For example, you claim $40,000 in business income but you have a property tax deduction that is consistent with a $1.5 million dollar house. Obviously any discrepancies between 1099's and reported income can be detected by the AI as well.  Apart from that, they are looking for very high income people for the most part, especially business owners.

 

 

Lakeshore Law Center

Jeffrey Wilens, Esq.

18340 Yorba Linda Blvd.

No. 107-610

Yorba Linda, CA 92886

714-854-7205

714-854-7206 (fax)

_____________________________________

This message is sent by a law firm and may contain information that is privileged or confidential. If you received this transmission in error, please notify the sender by reply e-mail and delete it.  For additional information, please visit our website at www.lakeshorelaw.org

 

From: vpFREE@yahoogroups.com <vpFREE@yahoogroups.com>
Sent: Wednesday, April 22, 2020 3:54 PM
To: vpFREE@yahoogroups.com
Subject: Re: [vpFREE] Stimulus check

 

 

I've been audited in the past (long long ago, when I was still in my medical residency) over an issue unrelated to gambling.  Other than it taking a little time, I represented myself and got what I considered to be a reasonable compromise.  My accountant advised me a couple years ago not to report charitable deductions in excess of $5,000 (most of it was donation of tangible goods, not checks written) because it was a red flag for audit; I asked them to deduct them, and that if I got audited, I had good records and felt like I would have a fighting chance.  If not, they disallow it, I lose and pay some taxes.

 

The IRS will never call you up and tell you that you overlooked some deductions -- they need you to submit those deductions and then they can disallow them, but it never works the other way :)

 

If you have contemporaneous honest-looking records of your sessions, with as much extra documentation as you can gather (e.g., win/loss reports, even though they aren't real evidence - but they're still documentation), you should stand a fighting chance -- and don't be afraid to appeal the first ruling against you (and the first one always is unless they made a clear error) to the next level; that's where I got my compromise.

 

It's not frightening, and usually the worse that can happen is you lose and pay the tax with some interest and penalty (those are not, however, trivial).  If, however, you have non-W2G income and don't report it, and they can prove it, NOW you're in trouble -- that's a jail-time offense, willfully not reporting income.

 

A friend of mine who is retired from the IRS said if you ever get audited, be sure to say "Gee, I didn't know that ... what do I have to do to make it right?" -- that should at least keep you out of jail if it's something like not reporting your non-W2G income.  But if it's a question of interpretation or they just don't believe your records, you may have a reasonable chance to prevail on appeal, or get a compromise; they are evaluated on how much money they get when handling audits, vs how much time they have to spend to get it, so they don't usually want to go to court (neither do you, probably).

 

I've also heard that the IRS is now so short-staffed that they can only audit less than 1% of returns -- but that's still a lot, and it doesn't matter how many audits they can't do, if they're auditing you.

 

==================

 

 

On Wednesday, April 22, 2020, 05:43:43 PM EDT, BP bjbigplayer@gmail.com [vpFREE] <vpfree@yahoogroups.com> wrote:

 

 

 

Report less than the sum of your W2-Gs as other income if you don't file Sch C and that is a red flag that usually results in a letter audit.  IRS still assumes, despite new rules allowing session reporting, that your Gross Session Wins must not be less than the sum of your W2-Gs.  If you have $50,900 in W2-Gs and report $15,000 in Other Income on Form 1040 the IRS wants to know where the rest of your win is. 

 

On Wed, Apr 22, 2020, 2:35 PM Jeffrey Wilens jeff@lakeshorelaw.org [vpFREE] <vpFREE@yahoogroups.com> wrote:

 

Sorry, your statement "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" does not make any sense to me..

 

Why would the IRS get mad if you report all your W2-G income and pay taxes on it?

 

 

Lakeshore Law Center

Jeffrey Wilens, Esq.

18340 Yorba Linda Blvd.

No. 107-610

Yorba Linda, CA 92886

714-854-7205

714-854-7206 (fax)

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From: vpFREE@yahoogroups.com <vpFREE@yahoogroups.com>
Sent: Wednesday, April 22, 2020 2:29 PM
To: vpFREE@yahoogroups.com
Subject: Re: [vpFREE] Stimulus check

 

 

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. 

 

On Wed, Apr 22, 2020, 2:20 PM Jeffrey Wilens jeff@lakeshorelaw.org [vpFREE] <vpFREE@yahoogroups.com> wrote:

 

You do realize a W2-G is a tax reporting document and is NOT intended for tax avoidance.  You have to pay taxes on gambling winnings.  It's just that they are only reported by the casino if the amount is $1200.  By comparison, any income over $600 is reported on 1099 to non-gamblers.  So, I really don't know what y0u are complaining about.  Gamblers have advantages in avoiding taxes over non-gamblers.

 

It sounds like many here should consider themselves professional gamblers.  Anyone who thinks they can make a decent living (what, $15 per hour?) playing 600 hands of VP per hour (like a robot) should probably consider that to be a trade.

 

Casual gamblers like me play at a much slower clip for entertainment value and I have never won $1200 or more in a single hand.  Gambling losses are similar to a night at a concert with dinner and I would not write those off. 

 

 

Lakeshore Law Center

Jeffrey Wilens, Esq.

18340 Yorba Linda Blvd.

No. 107-610

Yorba Linda, CA 92886

714-854-7205

714-854-7206 (fax)

_____________________________________

This message is sent by a law firm and may contain information that is privileged or confidential. If you received this transmission in error, please notify the sender by reply e-mail and delete it.  For additional information, please visit our website at www.lakeshorelaw.org

 

From: vpFREE@yahoogroups.com <vpFREE@yahoogroups.com>
Sent: Wednesday, April 22, 2020 2:02 PM
To: vpFREE@yahoogroups.com
Subject: Re: [vpFREE] Stimulus check

 

 

The doubling of the standard deduction has chilled my desire to gamble for more than quarters..

 

I've long wondered why the American Gaming Association https://www.americangaming.org/  has never turned its lobbyists loose on the law that requires a W2-G to be issued for wins of $1,200 or higher.  It  would make only a tiny dent in federal and state tax receipts, simplify casinos' bookkeeping, and connect the tax laws to common sense. 

 

Someone else posted that taxes aren't fair; nowhere is that more true than here.  There aren't many folks who actually have a gambling profit for a year unless they happen to hit a mammoth jackpot. I know that "income" broadly defined means any money received, but with other income generating activities, the recipient is allowed to deduct offsetting expenses/losses.  Even for degenerate gamblers like us, the tax laws' definition of "taxable income" should have some relationship to "profit."

 

Or, if Congress can't be that reasonable, at least increase the W2-G threshhold to a much higher amount.  It's been $1,200 for as long as I can remember.  $1,200 in 1980 had the same purchasing power as $3,759 today.  A $5,000 threshhold would suit this former $1 VP player but many people who have large actual net losses would need a higher threshhold to escape governmental abuse. 

 

GMan.

 

 

On Wed, Apr 22, 2020 at 3:15 PM Marsha Cuddington mcuddington@hotmail.com [vpFREE] <vpFREE@yahoogroups.com> wrote:

 

Deduction of losses against winnings still worked for me on the federal, but some states don't allow that.  That's where I got burned.  Returned to my home state of NC, which had always been "safe", only to find that they had changed the tax code.  There are several states that way now, so I wonder if this nasty trend is growing!  Indiana and Ohio had the same rules so maybe it's just following me…..

 

Thinking Nevada would be the last state to burn gamblers, so it's still on my list for places to retire 😉

 

From: vpFREE@yahoogroups.com <vpFREE@yahoogroups.com>
Sent: Wednesday, April 22, 2020 12:26 AM
To: vpFREE@yahoogroups.com
Subject: Re: [vpFREE] Stimulus check

 

 

You can deduct the losings if you itemize -- I've been doing it for years -- up to the amount of your winnings -- but starting last year (2018) I was unable to itemize because the standard deduction was higher, and I therefore got hit with tax on my winnings, while my larger losses did me no good.  Again in 2019.  Likewise charitable deductions; we've downsized and have been clearing out gobs of accumulated goods donated to Goodwill and similar, but no deduction anymore.

 

But nobody ever said taxes were "fair" -- nobody :)

 

--------------

 

 

On Tuesday, April 21, 2020, 08:06:38 PM EDT, William Lobuzzetta LOBO1971L@netscape.net [vpFREE] <vpfree@yahoogroups.com> wrote:

 

 

 

Its not fair to not deduct the losings and then total your income

-----Original Message-----
From: Marsha Cuddington mcuddington@hotmail.com [vpFREE] <vpFREE@yahoogroups.com>
To: vpFREE@yahoogroups.com <vpFREE@yahoogroups.com>
Sent: Tue, Apr 21, 2020 8:02 pm
Subject: RE: [vpFREE] Stimulus check

 

Yes and (UGH), just had to pay a whopping tax bill due to those W2Gs.  Closing the casinos protects me in more ways than one!

 

From: vpFREE@yahoogroups.com <vpFREE@yahoogroups.com>
Sent: Tuesday, April 21, 2020 7:59 PM
To: vpFREE@yahoogroups.com
Subject: [vpFREE] Stimulus check

 

 

Anyone else not getting a stimulus check because W2-g income was too high?😡.

Sent from my iPhone

 

 

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