vpFREE2 Forums

XVP: Tax filing with supporting documentation? (some tax advice from me)

#21

I have to voice my opinion, since this horse hasn't been beaten to death yet.
  My wife and I have been VP players for better on 20 years. Fifteen of those years have been at the $1, $2 and $5 level. We have numerous W-2Gs every year. We do not keep a diary. We get a win/loss statement every year from the casinos we play at. We bring a check (singular) on our gambling trips. We write one check and one check only for our trip at the casino cage. We use our win/loss statements, cancelled checks and monthly checking account statement to prove our wins and losses to the IRS if we are ever audited. Oh, I forgot to mention. We pay a reputable CPA/CFP to do our taxes every year. We have never been audited, but if we are, we have the documentation to back up what we claim.

···

Dave Decot <davedecot@yahoo.com> wrote:
          
But we must ponder why IRS finds gamblers' diaries "more reliable" than
casino win/loss statements.

The gambler's diary has all of the same reliability problems as win/loss
statements, and more.

The gambler's diary is kept by the gambler, someone with a vested
interest in minimizing reported winnings, while the win/loss statement
is kept by the casino, who is presumably more financially interested in
conforming to IRS regulations and not losing their license.

If "uncarded play" is a problem, why isn't "undiaried play" a problem?
Players have an incentive to card their play (comps/cashback). Players
have an incentive not to self-document their winning sessions and to
self-document their losing sessions (lower taxes).

Which is more likely to be accurate, the pit critter's "guess" or the
player's "guess", given the desire of the player to minimize her taxes?

Is it not just as possible that a gambler's diary might "lose large
chunks of play" in bookkeeping mistakes, since the casino uses a
computer to track slot/VP action, and the player is forbidden to have a
computer while playing?

The only advantage to the player's diary is that it's submitted under
penalty of perjury, and the casino's win/loss statements aren't.

I don't see a diary as inherently reliable; in fact, I see more reasons
for IRS to consider a win/loss statement at least as, if not more,
reliable. But they still insist on the diary.

Dave
------------------------------
eecounter wrote:

--- In vpFREE@yahoogroups.com, "kcace1024" <cy4873@...> wrote:

Jean,

Everyone keeps saying the win/loss statements are "notoriously
inaccurate," but I have found the statements from my local casinos
highly accurate.......................

1. What if you have some amount of uncarded play? (Yes - there are
logical reasons to do this, even on machines). This will
automatically make your win/loss statement inaccurate.

2. What if you put some amount of your play on someone else's card?
Now you have created inaccurate win/loss statements for two people at
the same time.

3. What if you play table games? Your win/loss statement will be
only as accurate as the guess by the pit critter who notes your buy-
in and color-up amounts.

4. What if you have unrated play at table games? See #1.

5. It is not all that uncommon for players to "lose" large blocks of
points to the uncharted depths of the slot club computer system. If
the points are lost, it seems logical that the associated win/loss
results for that block of play might also be lost.

EE

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

#22

I have to voice my opinion, since this horse hasn't been beaten to death yet.
  My wife and I have been VP players for better on 20 years. Fifteen of those years have been at the $1, $2 and $5 level. We have numerous W-2Gs every year. We do not keep a diary. We get a win/loss statement every year from the casinos we play at. We bring a check (singular) on our gambling trips. We write one check and one check only for our trip at the casino cage. We use our win/loss statements, cancelled checks and monthly checking account statement to prove our wins and losses to the IRS if we are ever audited. Oh, I forgot to mention. We pay a reputable CPA/CFP to do our taxes every year. We have never been audited, but if we are, we have the documentation to back up what we claim.

···

Dave Decot <davedecot@yahoo.com> wrote:
          
But we must ponder why IRS finds gamblers' diaries "more reliable" than
casino win/loss statements.

The gambler's diary has all of the same reliability problems as win/loss
statements, and more.

The gambler's diary is kept by the gambler, someone with a vested
interest in minimizing reported winnings, while the win/loss statement
is kept by the casino, who is presumably more financially interested in
conforming to IRS regulations and not losing their license.

If "uncarded play" is a problem, why isn't "undiaried play" a problem?
Players have an incentive to card their play (comps/cashback). Players
have an incentive not to self-document their winning sessions and to
self-document their losing sessions (lower taxes).

Which is more likely to be accurate, the pit critter's "guess" or the
player's "guess", given the desire of the player to minimize her taxes?

Is it not just as possible that a gambler's diary might "lose large
chunks of play" in bookkeeping mistakes, since the casino uses a
computer to track slot/VP action, and the player is forbidden to have a
computer while playing?

The only advantage to the player's diary is that it's submitted under
penalty of perjury, and the casino's win/loss statements aren't.

I don't see a diary as inherently reliable; in fact, I see more reasons
for IRS to consider a win/loss statement at least as, if not more,
reliable. But they still insist on the diary.

Dave
------------------------------
eecounter wrote:

--- In vpFREE@yahoogroups.com, "kcace1024" <cy4873@...> wrote:

Jean,

Everyone keeps saying the win/loss statements are "notoriously
inaccurate," but I have found the statements from my local casinos
highly accurate.......................

1. What if you have some amount of uncarded play? (Yes - there are
logical reasons to do this, even on machines). This will
automatically make your win/loss statement inaccurate.

2. What if you put some amount of your play on someone else's card?
Now you have created inaccurate win/loss statements for two people at
the same time.

3. What if you play table games? Your win/loss statement will be
only as accurate as the guess by the pit critter who notes your buy-
in and color-up amounts.

4. What if you have unrated play at table games? See #1.

5. It is not all that uncommon for players to "lose" large blocks of
points to the uncharted depths of the slot club computer system. If
the points are lost, it seems logical that the associated win/loss
results for that block of play might also be lost.

EE

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

#23

<<My wife and I have been VP players for better on 20 years. Fifteen of those years have been at the $1, $2 and $5 level. We have numerous W-2Gs every year. We do not keep a diary. We get a win/loss statement every year from the casinos we play at. We bring a check (singular) on our gambling trips. We write one check and one check only for our trip at the casino cage. We use our win/loss statements, cancelled checks and monthly checking account statement to prove our wins and losses to the IRS if we are ever audited. Oh, I forgot to mention. We pay a reputable CPA/CFP to do our taxes every year. We have never been audited, but if we are, we have the documentation to back up what we claim.>>

This is an example of the premise I talked about earlier. This manner of record-keeping "fits" this gambler's particular circumstances. Sounds like he takes multi-day trips to a casino and perhaps not very often. He has good records in case of an audit, ones that do the same job as a "log." I imagine if Marissa was his tax preparer, however, she would probably counsel him to keep a log just to be sure. However, I imagine if he doesn't go on casino trips too often, he could reconstruct a log if he ever needed one for the IRS.

Marissa does recommend shorter "sessions" than whole multi-day trips. One might get by with that in an audit, she says, but in her experience the IRS is looking for shorter sessions, like for one day or even for a change of games or casinos. We discuss this subject at length in the tax book.

Now his way of "keeping track" wouldn't work for Brad and me since we live in Vegas and don't have separate "trips." We have to keep a diary to keep track of our play which can be anywhere from a couple times a week to perhaps on occasion for many days straight. (However, as an aside, when we take a multi-day trip out of town and play rather continually off and on, we sometimes start with one designated bankroll amount and work out of that for 2-3 days and then have a "summary" win or loss figure for our log.)

···

________________
Jean $�ott, Frugal Gambler
http://queenofcomps.com/
"Tax Help for Gamblers" now
in e-book form for $9.98.
Download immediately at
http://www.shoplva.com/welcomeEbooks.cfm

#24

<<Your gambling log can say whatever you want it to say which is why it
really has very little value>>

Of course people can make up a fake diary to prove whatever they want to, but that does not mean it has little value. Actually it is very difficult to make up figures that would correspond to your bank account and/or lifestyle if this was a large amount the IRS was trying to track.

Detailed diaries have been the money-saving documentation that has got many many taxpayers through an audit. And, of course, the more other documentation you have the better. Win/loss statements can be good supplementary proof BUT they can sometimes do more harm than good. Sometimes a tax agent (federal or more likely state) will want to use a huge coin-out figure as your gross win and that might be worse than using your W-2G figure!! We discuss this danger in the tax book.

···

________________
Jean $�ott, Frugal Gambler
http://queenofcomps.com/
"Tax Help for Gamblers" now
in e-book form for $9.98.
Download immediately at
http://www.shoplva.com/welcomeEbooks.cfm

#25

<<Everyone keeps saying the win/loss statements are "notoriously
inaccurate," but I have found the statements from my local casinos
highly accurate>>

That's good for you but is your limited personal experience. We have received scores (hundreds) of them over the 18 years we have been playing VP and the vast majority are not accurate. Some have given our lifetime total figures over several years. Some aren't clear whether W-2G jackpots are included. Most we get these days are not broken down with daily totals - although in a serious audit we might be able to get that information by request. Almost all have a disclaimer somewhere that these may not be a complete record of our play.

···

________________
Jean $�ott, Frugal Gambler
http://queenofcomps.com/
"Tax Help for Gamblers" now
in e-book form for $9.98.
Download immediately at
http://www.shoplva.com/welcomeEbooks.cfm

#26

Cathy,

Your situation with winnings exceeding W2 amounts is quite unusual in
my opinion. I see you travel from Maine to gamble. If I were you I
would count each trip I made as a separate session to minimize my
winnings. There is no definition of a session and I think a trip
session is a very reasonable way to keep track of your play. As long
as your winnings are still more than your W2s I do not think IRS will
look any further.

Chris

Thanks for your input, everyone.

I agree, Mickey, it would look quite suspicious for my winnings to

equal the exact amount of

my W2Gs. And don't worry, I will take the legal and safe route,

Jean. And Chris, as you say,

my log can say what I want it to say, so if nothing else, I will at

least "amend" the log and

combine some sessions where I took a break for a few hours and

recorded 2 sessions for the

day and combine them into one session. That will reduce my winnings

in some cases, which

is important since my losses do not exceed the standard deduction

so I will not be filing a

Schedule A.

This is what I get for being so darned lucky last year. I don't

feel so lucky now!

···

--- In vpFREE@yahoogroups.com, "Cathy" <kitchat123@...> wrote:

Again, thank you everyone!

Cathy

#27

Jean,

Since I do not live in a gambling town, I have been
recording sessions in my log as one session equals
one trip to Vegas (regardless of the number of days
I'm there).

Does your comment below mean that, for your session
entry in your log, your "session" was 2-3 days long
(like the way I'm doing mine) for the multi-day trip
out of town?

Curtis

···

On 4/14/08, Jean Scott <queenofcomps@cox.net> wrote:

(However, as an aside, when we take a multi-day trip out of town
and play rather continually off and on, we sometimes start with
one designated bankroll amount and work out of that for 2-3 days
and then have a "summary" win or loss figure for our log.)

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

#28

Thanks, Chris. Just for "fun", I will do a comparison and see how things would come out if I
recorded my wins/losses per trip instead of per day, as I do now. I did at least combine a few
days that had more than one session into just one session per day, so that helped reduce the
winnings a little.

Cathy

···

--- In vpFREE@yahoogroups.com, "kcace1024" <cy4873@...> wrote:

Cathy,
. There is no definition of a session and I think a trip
session is a very reasonable way to keep track of your play. As long
as your winnings are still more than your W2s I do not think IRS will
look any further.

Chris

#29

<<Does your comment below mean that, for your session
entry in your log, your "session" was 2-3 days long
(like the way I'm doing mine) for the multi-day trip
out of town?>>

Yes, but I hesitate to recommend that method for all of your play. Most of my diary changes "sessions" when we change casinos, so that often gives us more than one session per day. I only do a "trip session" 1-3 times a year, a very small part of my diary that has umpteen days with 1-3 "sessions" per day, 4-6 days a week.

···

________________
Jean $�ott, Frugal Gambler
http://queenofcomps.com/
"Tax Help for Gamblers" now
in e-book form for $9.98.
Download immediately at
http://www.shoplva.com/welcomeEbooks.cfm

#30

BINGO! The IRS is giving you a chance to hang yourself. It's the same
as corporate accounting books, sure they can be forged, and often are,
but once the fraud is uncovered, the perp does the walk. Google
"ENRON" for details.

···

--- In vpFREE@yahoogroups.com, Dave Decot <davedecot@...> wrote:

The only advantage to the player's diary is that it's submitted under
penalty of perjury, and the casino's win/loss statements aren't.

#31

A few further comments:

The gambler's diary is kept by the gambler, someone with a vested
interest in minimizing reported winnings, while the win/loss statement
is kept by the casino, who is presumably more financially interested in
conforming to IRS regulations and not losing their license.

There are no IRS regulations about win/loss statements. It's just a
guideline issued by the casino, similar to guideline statements you
might get from your broker. If there is a mistake, the casino has no
liability, they are just giving you an estimate, it is your
responsibility to deal with the IRS.

I don't see a diary as inherently reliable; in fact, I see more

reasons

for IRS to consider a win/loss statement at least as, if not more,
reliable. But they still insist on the diary.

That's correct. If you want to fight the system, best wishes on your
next audit. The IRS wants a diary, if you want to pick a fight with
the IRS, as I said, best wishes.

···

--- In vpFREE@yahoogroups.com, Dave Decot <davedecot@...> wrote: