vpFREE2 Forums

Help! IRS says I owe money

#1

11a. Help! IRS says I owe money
Date: Thu Mar 26, 2009 7:20 pm ((PDT))

Has anyone else dealt with this problem?:

- In 2007, I kept a pretty good gambling journal, which showed winning days
totalling about 32K and losing days about 38K. I filed a 1040, noting the 32K in
earnings but itemizing 32K (only up to my winnings).

- Well, today I receive a letter saying I owe $1,700! They added up the W2-G's
and it comes to 38K, above the 32K I reportedly won. This part is true, HOWEVER,
they only see teh w-2G's and not the losses that came immediately after being
paid those jackpots. I mean, it's possible to win a 4K royal jackpot and then
within hours blow that entire sum back playing $5 VP. So net for that day is
zero, not 4K.

I can file a response, they say, with documentation. Should I file my complete
journal for that year with an explanation on the cover sheet? Or can I take it
to an IRS office?

Or am I screwed?

You are "screwed" only to the extent that your best efforts don't guarantee a correct determination by the IRS, and it might, in the end, turn out to be most economical to just pay them.

But first... DO try every step they allow you that's not too costly / burdensome to you. Start with the response, explaining that you used the session method of determining your wins and losses and how that can result in more W2G money than reported winnings. I'd send them copies of the entire gambling journal to show them you are keeping your records contemporaneously and in good faith. If they still try to collect the tax, there is probably (my last audit was 30 years ago, thank goodness) still a process for an appeal, first to a low-level IRS officer and then to a higher-level, that you can do yourself without hiring a tax professional or attorney (which would be good advice for larger amounts or a charge of tax evasion / fraud, but not for what you owe, most likely). It used to be that only the second level of appeal was a person who had the authority to "make a deal" or really do something about your case.

It consumes a little time, but is not as unpleasant as some suggest, and again, the worst that can happen is they still assess your income "their way" and you have to pay the tax, interest, and penalty (you might at least, if all else looks like it's going to fail, be able to talk your way out of the penalty).

--BG

···

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

#2

I thought this was discussed here last year that the amount reported as winnings must always equal or be greater than W2-Gs but you can then adjust the amount of your losses to compensate for any gross up of winnings.

Any amount that is less than the amount of W2-Gs received will probably trigger an audit or inquiry.

···

To: vpFREE@yahoogroups.com
From: b.glazer@att.net
Date: Fri, 27 Mar 2009 16:47:35 +0000
Subject: [vpFREE] Help! IRS says I owe money

> 11a. Help! IRS says I owe money
> Date: Thu Mar 26, 2009 7:20 pm ((PDT))
>
> Has anyone else dealt with this problem?:
>
> - In 2007, I kept a pretty good gambling journal, which showed winning days
> totalling about 32K and losing days about 38K. I filed a 1040, noting the 32K in
> earnings but itemizing 32K (only up to my winnings).
>
> - Well, today I receive a letter saying I owe $1,700! They added up the W2-G's
> and it comes to 38K, above the 32K I reportedly won. This part is true, HOWEVER,
> they only see teh w-2G's and not the losses that came immediately after being
> paid those jackpots. I mean, it's possible to win a 4K royal jackpot and then
> within hours blow that entire sum back playing $5 VP. So net for that day is
> zero, not 4K.
>
> I can file a response, they say, with documentation. Should I file my complete
> journal for that year with an explanation on the cover sheet? Or can I take it
> to an IRS office?
>
> Or am I screwed?
>

You are "screwed" only to the extent that your best efforts don't guarantee a correct determination by the IRS, and it might, in the end, turn out to be most economical to just pay them.

But first... DO try every step they allow you that's not too costly / burdensome to you. Start with the response, explaining that you used the session method of determining your wins and losses and how that can result in more W2G money than reported winnings. I'd send them copies of the entire gambling journal to show them you are keeping your records contemporaneously and in good faith. If they still try to collect the tax, there is probably (my last audit was 30 years ago, thank goodness) still a process for an appeal, first to a low-level IRS officer and then to a higher-level, that you can do yourself without hiring a tax professional or attorney (which would be good advice for larger amounts or a charge of tax evasion / fraud, but not for what you owe, most likely). It used to be that only the second level of appeal was a person who had the authority to "make a deal" or really do something about your case.

It consumes a little time, but is not as unpleasant as some suggest, and again, the worst that can happen is they still assess your income "their way" and you have to pay the tax, interest, and penalty (you might at least, if all else looks like it's going to fail, be able to talk your way out of the penalty).

--BG

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

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#3

Thanks, Barry. I will file the response with an explanation of sessions, along with a copy of spreadsheet page showing winning sessions and losing sessions. I'll see what that does for me.

···

--- In vpFREE@yahoogroups.com, "Barry Glazer" <b.glazer@...> wrote:

> 11a. Help! IRS says I owe money
> Date: Thu Mar 26, 2009 7:20 pm ((PDT))
>
> Has anyone else dealt with this problem?:
>
> - In 2007, I kept a pretty good gambling journal, which showed winning days
> totalling about 32K and losing days about 38K. I filed a 1040, noting the 32K in
> earnings but itemizing 32K (only up to my winnings).
>
> - Well, today I receive a letter saying I owe $1,700! They added up the W2-G's
> and it comes to 38K, above the 32K I reportedly won. This part is true, HOWEVER,
> they only see teh w-2G's and not the losses that came immediately after being
> paid those jackpots. I mean, it's possible to win a 4K royal jackpot and then
> within hours blow that entire sum back playing $5 VP. So net for that day is
> zero, not 4K.
>
> I can file a response, they say, with documentation. Should I file my complete
> journal for that year with an explanation on the cover sheet? Or can I take it
> to an IRS office?
>
> Or am I screwed?
>

You are "screwed" only to the extent that your best efforts don't guarantee a correct determination by the IRS, and it might, in the end, turn out to be most economical to just pay them.

But first... DO try every step they allow you that's not too costly / burdensome to you. Start with the response, explaining that you used the session method of determining your wins and losses and how that can result in more W2G money than reported winnings. I'd send them copies of the entire gambling journal to show them you are keeping your records contemporaneously and in good faith. If they still try to collect the tax, there is probably (my last audit was 30 years ago, thank goodness) still a process for an appeal, first to a low-level IRS officer and then to a higher-level, that you can do yourself without hiring a tax professional or attorney (which would be good advice for larger amounts or a charge of tax evasion / fraud, but not for what you owe, most likely). It used to be that only the second level of appeal was a person who had the authority to "make a deal" or really do something about your case.

It consumes a little time, but is not as unpleasant as some suggest, and again, the worst that can happen is they still assess your income "their way" and you have to pay the tax, interest, and penalty (you might at least, if all else looks like it's going to fail, be able to talk your way out of the penalty).

--BG

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

#4

Actually, I have enough loses to offset the total of their W-2G list, but that kind of defeats the whole purpose doesn't it? What's the point of keeping an accurate journal if all you really need to do is offset W2-G's?

···

--- In vpFREE@yahoogroups.com, "caseydog73" <caseydog73@...> wrote:

Thanks, Barry. I will file the response with an explanation of sessions, along with a copy of spreadsheet page showing winning sessions and losing sessions. I'll see what that does for me.

--- In vpFREE@yahoogroups.com, "Barry Glazer" <b.glazer@> wrote:
>
> > 11a. Help! IRS says I owe money
> > Date: Thu Mar 26, 2009 7:20 pm ((PDT))
> >
> > Has anyone else dealt with this problem?:
> >
> > - In 2007, I kept a pretty good gambling journal, which showed winning days
> > totalling about 32K and losing days about 38K. I filed a 1040, noting the 32K in
> > earnings but itemizing 32K (only up to my winnings).
> >
> > - Well, today I receive a letter saying I owe $1,700! They added up the W2-G's
> > and it comes to 38K, above the 32K I reportedly won. This part is true, HOWEVER,
> > they only see teh w-2G's and not the losses that came immediately after being
> > paid those jackpots. I mean, it's possible to win a 4K royal jackpot and then
> > within hours blow that entire sum back playing $5 VP. So net for that day is
> > zero, not 4K.
> >
> > I can file a response, they say, with documentation. Should I file my complete
> > journal for that year with an explanation on the cover sheet? Or can I take it
> > to an IRS office?
> >
> > Or am I screwed?
> >
>
> You are "screwed" only to the extent that your best efforts don't guarantee a correct determination by the IRS, and it might, in the end, turn out to be most economical to just pay them.
>
> But first... DO try every step they allow you that's not too costly / burdensome to you. Start with the response, explaining that you used the session method of determining your wins and losses and how that can result in more W2G money than reported winnings. I'd send them copies of the entire gambling journal to show them you are keeping your records contemporaneously and in good faith. If they still try to collect the tax, there is probably (my last audit was 30 years ago, thank goodness) still a process for an appeal, first to a low-level IRS officer and then to a higher-level, that you can do yourself without hiring a tax professional or attorney (which would be good advice for larger amounts or a charge of tax evasion / fraud, but not for what you owe, most likely). It used to be that only the second level of appeal was a person who had the authority to "make a deal" or really do something about your case.
>
> It consumes a little time, but is not as unpleasant as some suggest, and again, the worst that can happen is they still assess your income "their way" and you have to pay the tax, interest, and penalty (you might at least, if all else looks like it's going to fail, be able to talk your way out of the penalty).
>
> --BG
>
> =================
>

#5

I think the point is if they ask you to prove that you have said
losses, your accurate records will help backup your side of the story.

···

On 27 Mar 2009, at 17:48, caseydog73 wrote:

Actually, I have enough loses to offset the total of their W-2G
list, but that kind of defeats the whole purpose doesn't it? What's
the point of keeping an accurate journal if all you really need to
do is offset W2-G's?

--- In vpFREE@yahoogroups.com, "caseydog73" <caseydog73@...> wrote:
>
> Thanks, Barry. I will file the response with an explanation of
sessions, along with a copy of spreadsheet page showing winning
sessions and losing sessions. I'll see what that does for me.
>
>
> --- In vpFREE@yahoogroups.com, "Barry Glazer" <b.glazer@> wrote:
> >
> > > 11a. Help! IRS says I owe money
> > > Date: Thu Mar 26, 2009 7:20 pm ((PDT))
> > >
> > > Has anyone else dealt with this problem?:
> > >
> > > - In 2007, I kept a pretty good gambling journal, which
showed winning days
> > > totalling about 32K and losing days about 38K. I filed a
1040, noting the 32K in
> > > earnings but itemizing 32K (only up to my winnings).
> > >
> > > - Well, today I receive a letter saying I owe $1,700! They
added up the W2-G's
> > > and it comes to 38K, above the 32K I reportedly won. This
part is true, HOWEVER,
> > > they only see teh w-2G's and not the losses that came
immediately after being
> > > paid those jackpots. I mean, it's possible to win a 4K royal
jackpot and then
> > > within hours blow that entire sum back playing $5 VP. So net
for that day is
> > > zero, not 4K.
> > >
> > > I can file a response, they say, with documentation. Should I
file my complete
> > > journal for that year with an explanation on the cover sheet?
Or can I take it
> > > to an IRS office?
> > >
> > > Or am I screwed?
> > >
> >
> > You are "screwed" only to the extent that your best efforts
don't guarantee a correct determination by the IRS, and it might,
in the end, turn out to be most economical to just pay them.
> >
> > But first... DO try every step they allow you that's not too
costly / burdensome to you. Start with the response, explaining
that you used the session method of determining your wins and
losses and how that can result in more W2G money than reported
winnings. I'd send them copies of the entire gambling journal to
show them you are keeping your records contemporaneously and in
good faith. If they still try to collect the tax, there is probably
(my last audit was 30 years ago, thank goodness) still a process
for an appeal, first to a low-level IRS officer and then to a
higher-level, that you can do yourself without hiring a tax
professional or attorney (which would be good advice for larger
amounts or a charge of tax evasion / fraud, but not for what you
owe, most likely). It used to be that only the second level of
appeal was a person who had the authority to "make a deal" or
really do something about your case.
> >
> > It consumes a little time, but is not as unpleasant as some
suggest, and again, the worst that can happen is they still assess
your income "their way" and you have to pay the tax, interest, and
penalty (you might at least, if all else looks like it's going to
fail, be able to talk your way out of the penalty).
> >
> > --BG
> >
> > =================
> >
>

[Non-text portions of this message have been removed]

#6

Session has become the default word for acceptable netting I suppose. I see it used a lot. I would define session as starting when I cam to the casino and ending when I cashed in my tokens for the day. So the cash out, net the cash in. The poster daily win/loss is pretty close to that.

If I went for a "trip" and spent my whole weekend at the same casino, I would not cash in till I went home. That would be one big long session.

I would not try to argue that I went home and didn't cash in for several trips. When I leave is when I end my session and I cash in at that time.

mrick

···

--- In vpFREE@yahoogroups.com, "Barry Glazer" <b.glazer@...> wrote:

> 11a. Help! IRS says I owe money
> Date: Thu Mar 26, 2009 7:20 pm ((PDT))
>
> Has anyone else dealt with this problem?:
>
> - In 2007, I kept a pretty good gambling journal, which showed winning days
> totalling about 32K and losing days about 38K. I filed a 1040, noting the 32K in
> earnings but itemizing 32K (only up to my winnings).
>
> - Well, today I receive a letter saying I owe $1,700! They added up the W2-G's
> and it comes to 38K, above the 32K I reportedly won. This part is true, HOWEVER,
> they only see teh w-2G's and not the losses that came immediately after being
> paid those jackpots. I mean, it's possible to win a 4K royal jackpot and then
> within hours blow that entire sum back playing $5 VP. So net for that day is
> zero, not 4K.
>
> I can file a response, they say, with documentation. Should I file my complete
> journal for that year with an explanation on the cover sheet? Or can I take it
> to an IRS office?
>
> Or am I screwed?
>

You are "screwed" only to the extent that your best efforts don't guarantee a correct determination by the IRS, and it might, in the end, turn out to be most economical to just pay them.

But first... DO try every step they allow you that's not too costly / burdensome to you. Start with the response, explaining that you used the session method of determining your wins and losses and how that can result in more W2G money than reported winnings. I'd send them copies of the entire gambling journal to show them you are keeping your records contemporaneously and in good faith. If they still try to collect the tax, there is probably (my last audit was 30 years ago, thank goodness) still a process for an appeal, first to a low-level IRS officer and then to a higher-level, that you can do yourself without hiring a tax professional or attorney (which would be good advice for larger amounts or a charge of tax evasion / fraud, but not for what you owe, most likely). It used to be that only the second level of appeal was a person who had the authority to "make a deal" or really do something about your case.

It consumes a little time, but is not as unpleasant as some suggest, and again, the worst that can happen is they still assess your income "their way" and you have to pay the tax, interest, and penalty (you might at least, if all else looks like it's going to fail, be able to talk your way out of the penalty).

--BG

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

#7

If your W-2 total is not much higher than your winning session total or if your W-2 total does not raise your taxes after deducting losses then I would not bother with reporting session method because you will be questioned on this. Some on this board ran into problems last year with the IRS accepting the session method. Perhaps the IRS is starting to accept the session reporting method.

This suggests a new tax strategy. You should almost always play your small and medium wins down to breakeven whenever possible. Ending as many sessions as possible at breakeven or a loss will minimize your adjusted gross income.

Chris

···

--- In vpFREE@yahoogroups.com, "caseydog73" <caseydog73@...> wrote:

Actually, I have enough loses to offset the total of their W-2G list, but that kind of defeats the whole purpose doesn't it? What's the point of keeping an accurate journal if all you really need to do is offset W2-G's?

--- In vpFREE@yahoogroups.com, "caseydog73" <caseydog73@> wrote:
>
> Thanks, Barry. I will file the response with an explanation of sessions, along with a copy of spreadsheet page showing winning sessions and losing sessions. I'll see what that does for me.
>
>
> --- In vpFREE@yahoogroups.com, "Barry Glazer" <b.glazer@> wrote:
> >
> > > 11a. Help! IRS says I owe money
> > > Date: Thu Mar 26, 2009 7:20 pm ((PDT))
> > >
> > > Has anyone else dealt with this problem?:
> > >
> > > - In 2007, I kept a pretty good gambling journal, which showed winning days
> > > totalling about 32K and losing days about 38K. I filed a 1040, noting the 32K in
> > > earnings but itemizing 32K (only up to my winnings).
> > >
> > > - Well, today I receive a letter saying I owe $1,700! They added up the W2-G's
> > > and it comes to 38K, above the 32K I reportedly won. This part is true, HOWEVER,
> > > they only see teh w-2G's and not the losses that came immediately after being
> > > paid those jackpots. I mean, it's possible to win a 4K royal jackpot and then
> > > within hours blow that entire sum back playing $5 VP. So net for that day is
> > > zero, not 4K.
> > >
> > > I can file a response, they say, with documentation. Should I file my complete
> > > journal for that year with an explanation on the cover sheet? Or can I take it
> > > to an IRS office?
> > >
> > > Or am I screwed?
> > >
> >
> > You are "screwed" only to the extent that your best efforts don't guarantee a correct determination by the IRS, and it might, in the end, turn out to be most economical to just pay them.
> >
> > But first... DO try every step they allow you that's not too costly / burdensome to you. Start with the response, explaining that you used the session method of determining your wins and losses and how that can result in more W2G money than reported winnings. I'd send them copies of the entire gambling journal to show them you are keeping your records contemporaneously and in good faith. If they still try to collect the tax, there is probably (my last audit was 30 years ago, thank goodness) still a process for an appeal, first to a low-level IRS officer and then to a higher-level, that you can do yourself without hiring a tax professional or attorney (which would be good advice for larger amounts or a charge of tax evasion / fraud, but not for what you owe, most likely). It used to be that only the second level of appeal was a person who had the authority to "make a deal" or really do something about your case.
> >
> > It consumes a little time, but is not as unpleasant as some suggest, and again, the worst that can happen is they still assess your income "their way" and you have to pay the tax, interest, and penalty (you might at least, if all else looks like it's going to fail, be able to talk your way out of the penalty).
> >
> > --BG
> >
> > =================
> >
>

#8

The session method is huge if you live in a state like I do that does not allow you to write off your losses against your wins. Since the State takes the number from the Fed return, the difference in what I owe the State is substantial. It is a much fairer and more accurate method of reporting gambling winnings and losses.

···

________________________________
From: kcace1024 <cy4873@hotmail.com>
To: vpFREE@yahoogroups.com
Sent: Saturday, March 28, 2009 1:30:29 AM
Subject: [vpFREE] Re: Help! IRS says I owe money

If your W-2 total is not much higher than your winning session total or if your W-2 total does not raise your taxes after deducting losses then I would not bother with reporting session method because you will be questioned on this. Some on this board ran into problems last year with the IRS accepting the session method. Perhaps the IRS is starting to accept the session reporting method.

This suggests a new tax strategy. You should almost always play your small and medium wins down to breakeven whenever possible. Ending as many sessions as possible at breakeven or a loss will minimize your adjusted gross income.

Chris

--- In vpFREE@yahoogroups. com, "caseydog73" <caseydog73@ ...> wrote:

Actually, I have enough loses to offset the total of their W-2G list, but that kind of defeats the whole purpose doesn't it? What's the point of keeping an accurate journal if all you really need to do is offset W2-G's?

--- In vpFREE@yahoogroups. com, "caseydog73" <caseydog73@ > wrote:
>
> Thanks, Barry. I will file the response with an explanation of sessions, along with a copy of spreadsheet page showing winning sessions and losing sessions. I'll see what that does for me.
>
>
> --- In vpFREE@yahoogroups. com, "Barry Glazer" <b.glazer@> wrote:
> >
> > > 11a. Help! IRS says I owe money
> > > Date: Thu Mar 26, 2009 7:20 pm ((PDT))
> > >
> > > Has anyone else dealt with this problem?:
> > >
> > > - In 2007, I kept a pretty good gambling journal, which showed winning days
> > > totalling about 32K and losing days about 38K. I filed a 1040, noting the 32K in
> > > earnings but itemizing 32K (only up to my winnings).
> > >
> > > - Well, today I receive a letter saying I owe $1,700! They added up the W2-G's
> > > and it comes to 38K, above the 32K I reportedly won. This part is true, HOWEVER,
> > > they only see teh w-2G's and not the losses that came immediately after being
> > > paid those jackpots. I mean, it's possible to win a 4K royal jackpot and then
> > > within hours blow that entire sum back playing $5 VP. So net for that day is
> > > zero, not 4K.
> > >
> > > I can file a response, they say, with documentation. Should I file my complete
> > > journal for that year with an explanation on the cover sheet? Or can I take it
> > > to an IRS office?
> > >
> > > Or am I screwed?
> > >
> >
> > You are "screwed" only to the extent that your best efforts don't guarantee a correct determination by the IRS, and it might, in the end, turn out to be most economical to just pay them.
> >
> > But first... DO try every step they allow you that's not too costly / burdensome to you. Start with the response, explaining that you used the session method of determining your wins and losses and how that can result in more W2G money than reported winnings. I'd send them copies of the entire gambling journal to show them you are keeping your records contemporaneously and in good faith. If they still try to collect the tax, there is probably (my last audit was 30 years ago, thank goodness) still a process for an appeal, first to a low-level IRS officer and then to a higher-level, that you can do yourself without hiring a tax professional or attorney (which would be good advice for larger amounts or a charge of tax evasion / fraud, but not for what you owe, most likely). It used to be that only the second level of appeal was a person who had the authority to "make a deal" or really do something about your case.
> >
> > It consumes a little time, but is not as unpleasant as some suggest, and again, the worst that can happen is they still assess your income "their way" and you have to pay the tax, interest, and penalty (you might at least, if all else looks like it's going to fail, be able to talk your way out of the penalty).
> >
> > --BG
> >
> > ============ =====
> >
>

[Non-text portions of this message have been removed]

#9

Which is another reason I like the cash out method. I don't use the term "sessions". The IRS doesn't either. But they do understand cashout and that squares with the Chief Counsel memo I posted below.

For machine players, this memorandum seems to help a lot.

mrick

···

--- In vpFREE@yahoogroups.com, Joel Fink <joel0457@...> wrote:

The session method is huge if you live in a state like I do that does not allow you to write off your losses against your wins. Since the State takes the number from the Fed return, the difference in what I owe the State is substantial. It is a much fairer and more accurate method of reporting gambling winnings and losses.

________________________________
From: kcace1024 <cy4873@...>
To: vpFREE@yahoogroups.com
Sent: Saturday, March 28, 2009 1:30:29 AM
Subject: [vpFREE] Re: Help! IRS says I owe money

If your W-2 total is not much higher than your winning session total or if your W-2 total does not raise your taxes after deducting losses then I would not bother with reporting session method because you will be questioned on this. Some on this board ran into problems last year with the IRS accepting the session method. Perhaps the IRS is starting to accept the session reporting method.

This suggests a new tax strategy. You should almost always play your small and medium wins down to breakeven whenever possible. Ending as many sessions as possible at breakeven or a loss will minimize your adjusted gross income.

Chris

--- In vpFREE@yahoogroups. com, "caseydog73" <caseydog73@ ...> wrote:
>
> Actually, I have enough loses to offset the total of their W-2G list, but that kind of defeats the whole purpose doesn't it? What's the point of keeping an accurate journal if all you really need to do is offset W2-G's?
>
>
> --- In vpFREE@yahoogroups. com, "caseydog73" <caseydog73@ > wrote:
> >
> > Thanks, Barry. I will file the response with an explanation of sessions, along with a copy of spreadsheet page showing winning sessions and losing sessions. I'll see what that does for me.
> >
> >
> > --- In vpFREE@yahoogroups. com, "Barry Glazer" <b.glazer@> wrote:
> > >
> > > > 11a. Help! IRS says I owe money
> > > > Date: Thu Mar 26, 2009 7:20 pm ((PDT))
> > > >
> > > > Has anyone else dealt with this problem?:
> > > >
> > > > - In 2007, I kept a pretty good gambling journal, which showed winning days
> > > > totalling about 32K and losing days about 38K. I filed a 1040, noting the 32K in
> > > > earnings but itemizing 32K (only up to my winnings).
> > > >
> > > > - Well, today I receive a letter saying I owe $1,700! They added up the W2-G's
> > > > and it comes to 38K, above the 32K I reportedly won. This part is true, HOWEVER,
> > > > they only see teh w-2G's and not the losses that came immediately after being
> > > > paid those jackpots. I mean, it's possible to win a 4K royal jackpot and then
> > > > within hours blow that entire sum back playing $5 VP. So net for that day is
> > > > zero, not 4K.
> > > >
> > > > I can file a response, they say, with documentation. Should I file my complete
> > > > journal for that year with an explanation on the cover sheet? Or can I take it
> > > > to an IRS office?
> > > >
> > > > Or am I screwed?
> > > >
> > >
> > > You are "screwed" only to the extent that your best efforts don't guarantee a correct determination by the IRS, and it might, in the end, turn out to be most economical to just pay them.
> > >
> > > But first... DO try every step they allow you that's not too costly / burdensome to you. Start with the response, explaining that you used the session method of determining your wins and losses and how that can result in more W2G money than reported winnings. I'd send them copies of the entire gambling journal to show them you are keeping your records contemporaneously and in good faith. If they still try to collect the tax, there is probably (my last audit was 30 years ago, thank goodness) still a process for an appeal, first to a low-level IRS officer and then to a higher-level, that you can do yourself without hiring a tax professional or attorney (which would be good advice for larger amounts or a charge of tax evasion / fraud, but not for what you owe, most likely). It used to be that only the second level of appeal was a person who had the authority to "make a deal" or really do something about your case.
> > >
> > > It consumes a little time, but is not as unpleasant as some suggest, and again, the worst that can happen is they still assess your income "their way" and you have to pay the tax, interest, and penalty (you might at least, if all else looks like it's going to fail, be able to talk your way out of the penalty).
> > >
> > > --BG
> > >
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> > >
> >
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