vpFREE2 Forums

VP Poker Player Audits

#1

Hi I'm Denny, and some of you may remember me as a serious poster on this website some 3-4 years ago. I am ex businessman who has been retired from the auto industry for 10 years.
The reason for this post is to warn other VP players that despite all one's best efforts, one may not qualify to use Schedule C.

Even though I played VP many years as a recreational visitor to Las Vegas, in 2006 I wanted to start risking significantly more money on video poker, but I learned enough by then to know that if I could not use Schedule C for Income Tax Purposes I would be heavily penalized by state (Michigan) and local and federal taxes making video poker an unsound speculation. I read all the books, (Chien, Scott, Dancer' Lewis, Johnston and others) to try to learn all the requirements to qualify as a "Professional". I hired an accountant and a lawyer and became a Corporation.
For calendar year 2006 when I showed positive year, I dutifully filed Schedule C with my return , but was audited. After a couple of back and forths with the IRS. they allowed my tax return as originally filed. This took several months and a lot of grief.

For CY 2007 I showed negative results and again was audited (They want me again to show all the gains as ordinary income and the losses as deductions (No schedule C) which would kill me from a tax perspective. After several back and forth between my accountant and the IRS , the IRS now still maintains I cannot use scedule C for my video poker play. I have received no satisfactory response other than: I quote the IRS "Gambling winnings and losses can only be reported on Scedule C when gambling activity is full time for the production of income for livelihood."
While I can only got to Vegas 5 times in 2007, I believe, according to Wynn Casino, I was one of, if not the largest, out of state video poker player visiting their casino that year. You just don't play this amount of money if you are not trying to win money. As an aside I am not addicted, because I do not play at any of our three large local Casinos in the Detroit area.

So win lose or draw it looks like next stop lies in tax court within the next 90 days.
This post is just informational for those who might think that getting a filed Scedule C accepted by the IRS is guaranteed.

I will report the results the conclusion of this very trying episode. Needless to say since these audits have started I have abandoned video poker play anywhere and that is the reason you haven't heard from me on this blog.

Denny

Denny

#2

Even if the tax court decides you are not entitled to file Sch. C, your
attorney should win an argument that you need only report session wins, and
not the W-2G total, as gambling wins. If you play high-limit video poker
that will likely be substantially less.

If you lose the Federal case, I would hope you could sue Michigan on the
grounds of the tax hit being unconscionable or something.

Cogno

···

-----Original Message-----
From: vpFREE@yahoogroups.com [mailto:vpF…@…com] On Behalf
Of denflo60
Sent: Wednesday, February 3, 2010 5:39 PM
To: vpFREE@yahoogroups.com
Subject: [vpFREE] VP Poker Player Audits

Hi I'm Denny, and some of you may remember me as a serious poster on
this website some 3-4 years ago. I am ex businessman who has been
retired from the auto industry for 10 years.
The reason for this post is to warn other VP players that despite all
one's best efforts, one may not qualify to use Schedule C.

Even though I played VP many years as a recreational visitor to Las
Vegas, in 2006 I wanted to start risking significantly more money on
video poker, but I learned enough by then to know that if I could not
use Schedule C for Income Tax Purposes I would be heavily penalized by
state (Michigan) and local and federal taxes making video poker an
unsound speculation. I read all the books, (Chien, Scott, Dancer'
Lewis, Johnston and others) to try to learn all the requirements to
qualify as a "Professional". I hired an accountant and a lawyer and
became a Corporation.
For calendar year 2006 when I showed positive year, I dutifully filed
Schedule C with my return , but was audited. After a couple of back
and forths with the IRS. they allowed my tax return as originally
filed. This took several months and a lot of grief.

For CY 2007 I showed negative results and again was audited (They want
me again to show all the gains as ordinary income and the losses as
deductions (No schedule C) which would kill me from a tax perspective.
After several back and forth between my accountant and the IRS , the
IRS now still maintains I cannot use scedule C for my video poker play.
I have received no satisfactory response other than: I quote the IRS
"Gambling winnings and losses can only be reported on Scedule C when
gambling activity is full time for the production of income for
livelihood."
While I can only got to Vegas 5 times in 2007, I believe, according to
Wynn Casino, I was one of, if not the largest, out of state video poker
player visiting their casino that year. You just don't play this
amount of money if you are not trying to win money. As an aside I am
not addicted, because I do not play at any of our three large local
Casinos in the Detroit area.

So win lose or draw it looks like next stop lies in tax court within
the next 90 days.
This post is just informational for those who might think that getting
a filed Scedule C accepted by the IRS is guaranteed.

I will report the results the conclusion of this very trying episode.
Needless to say since these audits have started I have abandoned video
poker play anywhere and that is the reason you haven't heard from me on
this blog.

Denny

Denny

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

vpFREE Links: http://members.cox.net/vpfree/Links.htm

Yahoo! Groups Links

#3

Denny

Is v/p your only source of income? Do you have a full time job? If it is
your only source of income I can't see how they can refuse your schedule c
filing. Especially if you are generating a profit! I tried using schedule c
in 2007 but lost because I also worked another job.

The Gambler

···

-----Original Message-----
From: vpFREE@yahoogroups.com [mailto:vpF…@…com] On Behalf Of
denflo60
Sent: Wednesday, February 03, 2010 8:38 PM
To: vpFREE@yahoogroups.com
Subject: [vpFREE] VP Poker Player Audits

Hi I'm Denny, and some of you may remember me as a serious poster on this
website some 3-4 years ago. I am ex businessman who has been retired from
the auto industry for 10 years.
The reason for this post is to warn other VP players that despite all one's
best efforts, one may not qualify to use Schedule C.

#4

Any throughts on a retiree with many 1099's but no W2 income (except w2G).

···

--- In vpFREE@yahoogroups.com, "Jan Spornhauer" <janspornhauer@...> wrote:

Denny

Is v/p your only source of income? Do you have a full time job? If it is
your only source of income I can't see how they can refuse your schedule c
filing. Especially if you are generating a profit! I tried using schedule c
in 2007 but lost because I also worked another job.

The Gambler

-----Original Message-----
From: vpFREE@yahoogroups.com [mailto:vpF…@…com] On Behalf Of
denflo60
Sent: Wednesday, February 03, 2010 8:38 PM
To: vpFREE@yahoogroups.com
Subject: [vpFREE] VP Poker Player Audits

Hi I'm Denny, and some of you may remember me as a serious poster on this
website some 3-4 years ago. I am ex businessman who has been retired from
the auto industry for 10 years.
The reason for this post is to warn other VP players that despite all one's
best efforts, one may not qualify to use Schedule C.

#5

To Jan the Gambler:

Here are the answers to your questions as I understand them.

My sources of Income are limited to:

Social Security
Pension including imputed income from same
My Business "Philatelic and Financial Speculation and Arbitrage" of which includes Video Poker under discussion.

The Business makes money, although in its second year of activity the video poker portion did not.

My business (Speculation) is my only job.

Thank you for your interest. Denny

···

--- In vpFREE@yahoogroups.com, "poordueto401k" <hard16@...> wrote:

Any throughts on a retiree with many 1099's but no W2 income (except w2G).
— In vpFREE@yahoogroups.com, "Jan Spornhauer" <janspornhauer@> wrote:
>
> Denny
>
> Is v/p your only source of income? Do you have a full time job? If it is
> your only source of income I can't see how they can refuse your schedule c
> filing. Especially if you are generating a profit! I tried using schedule c
> in 2007 but lost because I also worked another job.
>
> The Gambler
>
>
> -----Original Message-----
> From: vpFREE@yahoogroups.com [mailto:vpF…@…com] On Behalf Of
> denflo60
> Sent: Wednesday, February 03, 2010 8:38 PM
> To: vpFREE@yahoogroups.com
> Subject: [vpFREE] VP Poker Player Audits
>
>
>
> Hi I'm Denny, and some of you may remember me as a serious poster on this
> website some 3-4 years ago. I am ex businessman who has been retired from
> the auto industry for 10 years.
> The reason for this post is to warn other VP players that despite all one's
> best efforts, one may not qualify to use Schedule C.
>

#6

Are you trying to use the gambling losses to offset other income from your
business?

Cogno

···

-----Original Message-----
From: vpFREE@yahoogroups.com [mailto:vpF…@…com] On Behalf
Of denflo60
Sent: Thursday, February 4, 2010 2:24 PM
To: vpFREE@yahoogroups.com
Subject: [vpFREE] Re: VP Poker Player Audits

To Jan the Gambler:

Here are the answers to your questions as I understand them.

My sources of Income are limited to:

Social Security
Pension including imputed income from same
My Business "Philatelic and Financial Speculation and Arbitrage" of
which includes Video Poker under discussion.

The Business makes money, although in its second year of activity the
video poker portion did not.

My business (Speculation) is my only job.

Thank you for your interest. Denny

— In vpFREE@yahoogroups.com, "poordueto401k" <hard16@…> wrote:
>
>
> Any throughts on a retiree with many 1099's but no W2 income (except
w2G).
> — In vpFREE@yahoogroups.com, "Jan Spornhauer" <janspornhauer@>
wrote:
> >
> > Denny
> >
> > Is v/p your only source of income? Do you have a full time job? If
it is
> > your only source of income I can't see how they can refuse your
schedule c
> > filing. Especially if you are generating a profit! I tried using
schedule c
> > in 2007 but lost because I also worked another job.
> >
> > The Gambler
> >
> >
> > -----Original Message-----
> > From: vpFREE@yahoogroups.com [mailto:vpF…@…com] On
Behalf Of
> > denflo60
> > Sent: Wednesday, February 03, 2010 8:38 PM
> > To: vpFREE@yahoogroups.com
> > Subject: [vpFREE] VP Poker Player Audits
> >
> >
> >
> > Hi I'm Denny, and some of you may remember me as a serious poster
on this
> > website some 3-4 years ago. I am ex businessman who has been
retired from
> > the auto industry for 10 years.
> > The reason for this post is to warn other VP players that despite
all one's
> > best efforts, one may not qualify to use Schedule C.
> >
>

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

vpFREE Links: http://members.cox.net/vpfree/Links.htm

Yahoo! Groups Links

#7

To cognoscenti:

No, I am not using gambling losses against other income from the business. Its only video poker gains versus video poker losses and the session methodology. There is no intermingling of income or expenses. Denny

···

--- In vpFREE@yahoogroups.com, "Cogno Scienti" <cognoscienti@...> wrote:

Are you trying to use the gambling losses to offset other income from your
business?

Cogno

> -----Original Message-----
> From: vpFREE@yahoogroups.com [mailto:vpF…@…com] On Behalf
> Of denflo60
> Sent: Thursday, February 4, 2010 2:24 PM
> To: vpFREE@yahoogroups.com
> Subject: [vpFREE] Re: VP Poker Player Audits
>
> To Jan the Gambler:
>
> Here are the answers to your questions as I understand them.
>
> My sources of Income are limited to:
>
> Social Security
> Pension including imputed income from same
> My Business "Philatelic and Financial Speculation and Arbitrage" of
> which includes Video Poker under discussion.
>
> The Business makes money, although in its second year of activity the
> video poker portion did not.
>
> My business (Speculation) is my only job.
>
> Thank you for your interest. Denny
>
> — In vpFREE@yahoogroups.com, "poordueto401k" <hard16@> wrote:
> >
> >
> > Any throughts on a retiree with many 1099's but no W2 income (except
> w2G).
> > — In vpFREE@yahoogroups.com, "Jan Spornhauer" <janspornhauer@>
> wrote:
> > >
> > > Denny
> > >
> > > Is v/p your only source of income? Do you have a full time job? If
> it is
> > > your only source of income I can't see how they can refuse your
> schedule c
> > > filing. Especially if you are generating a profit! I tried using
> schedule c
> > > in 2007 but lost because I also worked another job.
> > >
> > > The Gambler
> > >
> > >
> > > -----Original Message-----
> > > From: vpFREE@yahoogroups.com [mailto:vpF…@…com] On
> Behalf Of
> > > denflo60
> > > Sent: Wednesday, February 03, 2010 8:38 PM
> > > To: vpFREE@yahoogroups.com
> > > Subject: [vpFREE] VP Poker Player Audits
> > >
> > >
> > >
> > > Hi I'm Denny, and some of you may remember me as a serious poster
> on this
> > > website some 3-4 years ago. I am ex businessman who has been
> retired from
> > > the auto industry for 10 years.
> > > The reason for this post is to warn other VP players that despite
> all one's
> > > best efforts, one may not qualify to use Schedule C.
> > >
> >
>
>
>
>
> ------------------------------------
>
> vpFREE Links: http://members.cox.net/vpfree/Links.htm
>
> Yahoo! Groups Links
>
>
>

#8

I think you should be able to win on the session methodology. I hope you can
win on the Sch. C. As far as I can tell, there is no statutory backbone to
the IRS's notion that gambling is the only profession that must be engaged
in full time to be a valid profession.

Please keep us updated.

Cogno

···

-----Original Message-----
From: vpFREE@yahoogroups.com [mailto:vpF…@…com] On Behalf
Of denflo60
Sent: Thursday, February 4, 2010 7:14 PM
To: vpFREE@yahoogroups.com
Subject: [vpFREE] Re: VP Poker Player Audits

To cognoscenti:

No, I am not using gambling losses against other income from the
business. Its only video poker gains versus video poker losses and the
session methodology. There is no intermingling of income or expenses.
Denny

— In vpFREE@yahoogroups.com, "Cogno Scienti" <cognoscienti@…>
wrote:
>
> Are you trying to use the gambling losses to offset other income from
your
> business?
>
> Cogno
>
> > -----Original Message-----
> > From: vpFREE@yahoogroups.com [mailto:vpF…@…com] On
Behalf
> > Of denflo60
> > Sent: Thursday, February 4, 2010 2:24 PM
> > To: vpFREE@yahoogroups.com
> > Subject: [vpFREE] Re: VP Poker Player Audits
> >
> > To Jan the Gambler:
> >
> > Here are the answers to your questions as I understand them.
> >
> > My sources of Income are limited to:
> >
> > Social Security
> > Pension including imputed income from same
> > My Business "Philatelic and Financial Speculation and Arbitrage" of
> > which includes Video Poker under discussion.
> >
> > The Business makes money, although in its second year of activity
the
> > video poker portion did not.
> >
> > My business (Speculation) is my only job.
> >
> > Thank you for your interest. Denny
> >
> > — In vpFREE@yahoogroups.com, "poordueto401k" <hard16@> wrote:
> > >
> > >
> > > Any throughts on a retiree with many 1099's but no W2 income
(except
> > w2G).
> > > — In vpFREE@yahoogroups.com, "Jan Spornhauer" <janspornhauer@>
> > wrote:
> > > >
> > > > Denny
> > > >
> > > > Is v/p your only source of income? Do you have a full time job?
If
> > it is
> > > > your only source of income I can't see how they can refuse your
> > schedule c
> > > > filing. Especially if you are generating a profit! I tried
using
> > schedule c
> > > > in 2007 but lost because I also worked another job.
> > > >
> > > > The Gambler
> > > >
> > > >
> > > > -----Original Message-----
> > > > From: vpFREE@yahoogroups.com [mailto:vpF…@…com] On
> > Behalf Of
> > > > denflo60
> > > > Sent: Wednesday, February 03, 2010 8:38 PM
> > > > To: vpFREE@yahoogroups.com
> > > > Subject: [vpFREE] VP Poker Player Audits
> > > >
> > > >
> > > >
> > > > Hi I'm Denny, and some of you may remember me as a serious
poster
> > on this
> > > > website some 3-4 years ago. I am ex businessman who has been
> > retired from
> > > > the auto industry for 10 years.
> > > > The reason for this post is to warn other VP players that
despite
> > all one's
> > > > best efforts, one may not qualify to use Schedule C.
> > > >
> > >
> >
> >
> >
> >
> > ------------------------------------
> >
> > vpFREE Links: http://members.cox.net/vpfree/Links.htm
> >
> > Yahoo! Groups Links
> >
> >
> >
>

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

vpFREE Links: http://members.cox.net/vpfree/Links.htm

Yahoo! Groups Links

#9

Denny

If that is the case there should be no reason for you to be restricted from
filing schedule c. What do you plan on doing in regards to the IRS?

Jan - The Gambler

···

_____

From: vpFREE@yahoogroups.com [mailto:vpF…@…com] On Behalf Of
denflo60
Sent: Thursday, February 04, 2010 10:14 PM
To: vpFREE@yahoogroups.com
Subject: [vpFREE] Re: VP Poker Player Audits

To cognoscenti:

No, I am not using gambling losses against other income from the business.
Its only video poker gains versus video poker losses and the session
methodology. There is no intermingling of income or expenses. Denny

--- In vpFREE@yahoogroups. <mailto:vpFREE%40yahoogroups.com> com, "Cogno
Scienti" <cognoscienti@...> wrote:

Are you trying to use the gambling losses to offset other income from your
business?

Cogno

> -----Original Message-----
> From: vpFREE@yahoogroups. <mailto:vpFREE%40yahoogroups.com> com

[mailto:vpFREE@yahoogroups. <mailto:vpFREE%40yahoogroups.com> com] On Behalf

> Of denflo60
> Sent: Thursday, February 4, 2010 2:24 PM
> To: vpFREE@yahoogroups. <mailto:vpFREE%40yahoogroups.com> com
> Subject: [vpFREE] Re: VP Poker Player Audits
>
> To Jan the Gambler:
>
> Here are the answers to your questions as I understand them.
>
> My sources of Income are limited to:
>
> Social Security
> Pension including imputed income from same
> My Business "Philatelic and Financial Speculation and Arbitrage" of
> which includes Video Poker under discussion.
>
> The Business makes money, although in its second year of activity the
> video poker portion did not.
>
> My business (Speculation) is my only job.
>
> Thank you for your interest. Denny
>
> --- In vpFREE@yahoogroups. <mailto:vpFREE%40yahoogroups.com> com,

"poordueto401k" <hard16@> wrote:

> >
> >
> > Any throughts on a retiree with many 1099's but no W2 income (except
> w2G).
> > --- In vpFREE@yahoogroups. <mailto:vpFREE%40yahoogroups.com> com, "Jan

Spornhauer" <janspornhauer@>

> wrote:
> > >
> > > Denny
> > >
> > > Is v/p your only source of income? Do you have a full time job? If
> it is
> > > your only source of income I can't see how they can refuse your
> schedule c
> > > filing. Especially if you are generating a profit! I tried using
> schedule c
> > > in 2007 but lost because I also worked another job.
> > >
> > > The Gambler
> > >
> > >
> > > -----Original Message-----
> > > From: vpFREE@yahoogroups. <mailto:vpFREE%40yahoogroups.com> com

[mailto:vpFREE@yahoogroups. <mailto:vpFREE%40yahoogroups.com> com] On

> Behalf Of
> > > denflo60
> > > Sent: Wednesday, February 03, 2010 8:38 PM
> > > To: vpFREE@yahoogroups. <mailto:vpFREE%40yahoogroups.com> com
> > > Subject: [vpFREE] VP Poker Player Audits
> > >
> > >
> > >
> > > Hi I'm Denny, and some of you may remember me as a serious poster
> on this
> > > website some 3-4 years ago. I am ex businessman who has been
> retired from
> > > the auto industry for 10 years.
> > > The reason for this post is to warn other VP players that despite
> all one's
> > > best efforts, one may not qualify to use Schedule C.
> > >
> >
>
>
>
>
> ------------------------------------
>
> vpFREE Links: http://members.cox.net/vpfree/Links.htm>

cox.net/vpfree/Links.htm

>
> Yahoo! Groups Links
>
>
>

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

#10

Thank you for the info -- very interesting. Good luck.

David K

···

To: vpFREE@yahoogroups.com
From: dennis.florence@worldnet.att.net
Date: Thu, 4 Feb 2010 01:38:30 +0000
Subject: [vpFREE] VP Poker Player Audits

Hi I'm Denny, and some of you may remember me as a serious poster on this website some 3-4 years ago. I am ex businessman who has been retired from the auto industry for 10 years.
The reason for this post is to warn other VP players that despite all one's best efforts, one may not qualify to use Schedule C.

Even though I played VP many years as a recreational visitor to Las Vegas, in 2006 I wanted to start risking significantly more money on video poker, but I learned enough by then to know that if I could not use Schedule C for Income Tax Purposes I would be heavily penalized by state (Michigan) and local and federal taxes making video poker an unsound speculation. I read all the books, (Chien, Scott, Dancer' Lewis, Johnston and others) to try to learn all the requirements to qualify as a "Professional". I hired an accountant and a lawyer and became a Corporation.
For calendar year 2006 when I showed positive year, I dutifully filed Schedule C with my return , but was audited. After a couple of back and forths with the IRS. they allowed my tax return as originally filed. This took several months and a lot of grief.

For CY 2007 I showed negative results and again was audited (They want me again to show all the gains as ordinary income and the losses as deductions (No schedule C) which would kill me from a tax perspective. After several back and forth between my accountant and the IRS , the IRS now still maintains I cannot use scedule C for my video poker play. I have received no satisfactory response other than: I quote the IRS "Gambling winnings and losses can only be reported on Scedule C when gambling activity is full time for the production of income for livelihood."
While I can only got to Vegas 5 times in 2007, I believe, according to Wynn Casino, I was one of, if not the largest, out of state video poker player visiting their casino that year. You just don't play this amount of money if you are not trying to win money. As an aside I am not addicted, because I do not play at any of our three large local Casinos in the Detroit area.

So win lose or draw it looks like next stop lies in tax court within the next 90 days.
This post is just informational for those who might think that getting a filed Scedule C accepted by the IRS is guaranteed.

I will report the results the conclusion of this very trying episode. Needless to say since these audits have started I have abandoned video poker play anywhere and that is the reason you haven't heard from me on this blog.

Denny

Denny

_________________________________________________________________
Your E-mail and More On-the-Go. Get Windows Live Hotmail Free.
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[Non-text portions of this message have been removed]

#11

"If that is the case there should be no reason for you to be restricted from
filing schedule c. "

My understanding is that the IRS (in all of their infinite thieving wisdom) are trying to distinguish between "gamblers" and those who by definition are "professional gamblers". It would be like myself deciding to build additions to my house off and on throughout the year and then trying to file a schedule C as a professional builder of some sort, and trying to write off my expenses, etc. They must establish some criteria to separate one from another, and since there are no professional licenses needed to become a professional gambler they have made up other rules.

It sounds to me that if you gamble a few times a year (as I believe you said you do), no matter how much money you gamble (after all, there are plenty of "whales" who aren't considered professionals) it still wouldn't qualify you as a "professional". I am guessing it would have to be the day-to-day use of gambling to provide the money that you are living off of that has to be part of the definition, rather than the fact that you have enough money to gamble like that when you want to a few times a year.

Video poker gains vs video poker losses and the session methodology is what all of us have to do when declaring losses against W2g's, etc. - and has nothing to do with being a professional or being supported by our video poker wins.

At least that's how I understand it, so far.

Valerie

__________ Information from ESET NOD32 Antivirus, version of virus signature database 4839 (20100205) __________

The message was checked by ESET NOD32 Antivirus.

http://www.eset.com

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

#12

As far as I can tell, the IRS has made up that definition out of whole
cloth. For any other venture, professional conduct and bona fide intent to
make a profit are sufficient to file Sch. C. There is no requirement of full
time, or poverty, to file Sch. C in general. So not being a tax attorney,
from what I understand, this should be a winnable case. If someone has
knowledge of legislative backing to the IRS's claim that professional
gamblers must be full time, please chime in.

Cogno

···

-----Original Message-----
From: vpFREE@yahoogroups.com [mailto:vpF…@…com] On Behalf
Of Valerie Pollard
Sent: Friday, February 5, 2010 9:19 AM
To: vpFREE@yahoogroups.com
Subject: Re: [vpFREE] Re: VP Poker Player Audits

"If that is the case there should be no reason for you to be restricted
from
filing schedule c. "

My understanding is that the IRS (in all of their infinite thieving
wisdom) are trying to distinguish between "gamblers" and those who by
definition are "professional gamblers". It would be like myself
deciding to build additions to my house off and on throughout the year
and then trying to file a schedule C as a professional builder of some
sort, and trying to write off my expenses, etc. They must establish
some criteria to separate one from another, and since there are no
professional licenses needed to become a professional gambler they have
made up other rules.

It sounds to me that if you gamble a few times a year (as I believe you
said you do), no matter how much money you gamble (after all, there are
plenty of "whales" who aren't considered professionals) it still
wouldn't qualify you as a "professional". I am guessing it would have
to be the day-to-day use of gambling to provide the money that you are
living off of that has to be part of the definition, rather than the
fact that you have enough money to gamble like that when you want to a
few times a year.

Video poker gains vs video poker losses and the session methodology is
what all of us have to do when declaring losses against W2g's, etc. -
and has nothing to do with being a professional or being supported by
our video poker wins.

At least that's how I understand it, so far.

Valerie

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#13

If a person only goes and gambles 5 times per year regardless of the wagered
amount, that may preclude him from filing schedule C. In reading government
regulations, I am not sure how many hours in a year are required; but I
would think gambling 5 times may be a stretch. I would think that one would
need to spend at least 1000 hours per year gambling and that still may not
be enough to satisfy the !RS. Maybe Dennis will find out something concrete
if he pursues his claim.

The Gambler

···

_____

From: vpFREE@yahoogroups.com [mailto:vpF…@…com] On Behalf Of
Cogno Scienti
Sent: Friday, February 05, 2010 4:05 PM
To: vpFREE@yahoogroups.com
Subject: RE: [vpFREE] Re: VP Poker Player Audits

As far as I can tell, the IRS has made up that definition out of whole
cloth. For any other venture, professional conduct and bona fide intent to
make a profit are sufficient to file Sch. C. There is no requirement of full
time, or poverty, to file Sch. C in general. So not being a tax attorney,
from what I understand, this should be a winnable case. If someone has
knowledge of legislative backing to the IRS's claim that professional
gamblers must be full time, please chime in.

Cogno

-----Original Message-----
From: vpFREE@yahoogroups. <mailto:vpFREE%40yahoogroups.com> com

[mailto:vpFREE@yahoogroups. <mailto:vpFREE%40yahoogroups.com> com] On Behalf

Of Valerie Pollard
Sent: Friday, February 5, 2010 9:19 AM
To: vpFREE@yahoogroups. <mailto:vpFREE%40yahoogroups.com> com
Subject: Re: [vpFREE] Re: VP Poker Player Audits

"If that is the case there should be no reason for you to be restricted
from
filing schedule c. "

My understanding is that the IRS (in all of their infinite thieving
wisdom) are trying to distinguish between "gamblers" and those who by
definition are "professional gamblers". It would be like myself
deciding to build additions to my house off and on throughout the year
and then trying to file a schedule C as a professional builder of some
sort, and trying to write off my expenses, etc. They must establish
some criteria to separate one from another, and since there are no
professional licenses needed to become a professional gambler they have
made up other rules.

It sounds to me that if you gamble a few times a year (as I believe you
said you do), no matter how much money you gamble (after all, there are
plenty of "whales" who aren't considered professionals) it still
wouldn't qualify you as a "professional". I am guessing it would have
to be the day-to-day use of gambling to provide the money that you are
living off of that has to be part of the definition, rather than the
fact that you have enough money to gamble like that when you want to a
few times a year.

Video poker gains vs video poker losses and the session methodology is
what all of us have to do when declaring losses against W2g's, etc. -
and has nothing to do with being a professional or being supported by
our video poker wins.

At least that's how I understand it, so far.

Valerie

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signature database 4839 (20100205) __________

The message was checked by ESET NOD32 Antivirus.

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

#14

Here's a link to a recent Card Player Magazine article about Billy Baxter and his US Supreme Court case [Baxter v United States], which established that full-time professional gamblers may file Schedule C. This won't solve the current posters' problems, but it is interesting.

http://www.cardplayer.com/cardplayer-magazines/65568-18-15/articles/14882-billy-baxter-the-man-who-made-a-difference-he-went-heads-up-against-the-irs-and-won

If the link doesn't come through Yahoo intact, go to www.cardplayer.com and enter "Billy Baxter" in the site's search window. This was about the 6th article in the search results.

One excerpt: "The [trial]... was heard in Reno, Nevada. The judge listened to the IRS' side and then to Baxter's side. In ruling, the judge said, 'I find the government's argument to be ludicrous. I just wish you had some money and could sit down with Mr. Baxter and play some poker.'"

The GMan