blonde poker forum

There's an interesting thread going on RGP at the moment about should US citizens inform the tax man of their 'poker winnings' from on-line sites!

My argument is that as online poker is probably illegal in most parts of the USA then why declare income on an illegal activity?

They say its better to declare the income as 'other earned income' and pay the taxes then not to do so at all and be prepared if the IRS catch up with them!

So what do you guys think?

are poker losses deductable?

Only if you declare to the IRS that you're a 'professional'!

then same must apply to winnings.

if that was the case there's be far fewer people claiming to be "poker pro's"

Could it not be argued that, as a poker professional, every penny you ever put into a pot is a legitimate business expense (money spent in order to make your profit), and is therefore tax-deductable?

"I raise.  Can I get a reciept for that?"

Apparently because Joe Hachem (winner of the 2005 WSOP) declared himself to be a professional poker player the IRS immediately $2.5M off him as a witholding tax.

The Australian authorities now want their cut!

He might be lucky enough to get 3M out of it!!  :-\

How can the Americans and the Aussies take a cut?

I think you will find that as a US citizen you have to pay tax on your global income and as such it is your responsibility to report all income regardless of whether it was made legally or illegally. (Not a lot of people know this but the same applies in the UK - your global income is taxable - although current legislation exempts your gambling winnings if they are not your sole income)

In other words it is not the source of the income that matters merely the income itself.

You also need to declare "large" amounts of money that you keep on deposit globally and there is a strong case to argue that you need to also declare that you keep $50k in Ultimate Bet and $40k in Poker Stars (say). Transfers between players (allowed by some sites when your account is verified and sanctioned to do so) are breaking money laundering laws and imho will lead to their long term downfall if permitted to continue as they represent a weak area which the US governernment can use to attack them).

If the IRS should find out about your income from any source that you have not declared you are liable to prosecution and very likely to get a heavy fine and even go to jail - it's considered very serious offence. On a side note if the law feels you have benefited financially from an illegal activity they can also seize your assets including homes, cars and anything else of value.

Even prostitutes in areas where their trade is deemed illegal have to declare their income for tax purposes (cf with failed attempts by prostitutes in the UK attempting to avoid paying tax by claiming the government is making money from immoral earnings - an offence in its own right - and you should all get the idea that once again it is the income itself and not the source that counts.

Bottom line - where governments feel they should get their cut you would do well to let them have it as in the long run it can cost you far more and especially so if you are American.

Joseph Hachem is Australian and as there is no tax treaty between the USA and Australia means he must have the mandatory amount deducted from his winnings. He can claim the tax back if he shows sufficient losses in gambling (eg losing sports tkts) along with expenses that he can use to offset his tax liability.

For UK Citizens (British Passport Holders) there is a tax treaty in place. You complete a W-8BEN (also need an Individual Tax Identification Number ITIN) and they will not deduct anything as you are expected to pay the tax in your home country so as not to pay it twice. Fortunately gambling winnings are currently not taxable in the UK and you end up keeping the whole of your winnings.

One of my gripes this year with The WSOP was their unhelpfulness towards non deduction of tax from British winners and the fact they changed their views on the interpretation of the tax rules half way through. The Bellagio applies and gets the ITIN for you and it's easy to get and free of charge and they store it on computer for future use - The WSOP/Rio decided to try and get people to call an independant US tax attorney who would charge you $10k for getting an ITIN for you. No doubt tif they had removed their heads from their arses they could have been more helpful to the overseas players.

that answer your question UKPoker?

lol

thx harry

'Fortunately gambling winnings are currently not taxable in the UK '

Do they still have to be declared?

if they are your sole income do you not have to declare them?

if you have a job and you win on the side, no

Have the UK tax laws changed overnight? Gambling winnings are not taxable. Doesn't matter if you have another job or not.

If this is the case, what constitutes a 'job' does a £5pw paper round count for instance?

it seems I am mistaken then

That is the question I asked

If you have a job, but win on the side, does it matter how much you win? - or is there still no requirement to declare?

You don't have to declare anything Red don't worry.

to what is Harry D referring then?

no Snoopy, it's irrelevant

My Dad is the evil tax man you all speak off... your earnings are none taxable!

The government will not incur the loses, as was said! He has never told me to declare my earnings and i'm sure you don't have to.

irrelevant of how much you earn and whether or not you hold a job?

irrelevant full stop.

However, Harry's statement above confused me a little

ITIN numbers are a pain in the arse to get.

Here's a link to where you can get all the information you need about getting one!

http://www.irs.gov/individuals/article/0,,id=96287,00.html

Took me about 3 months to get one myself (cause of my mega selling book) but now I've got one I suppose it was all worth the hassle as it means that I never have to pay tax on earnings derived in the US howsoever made!

I'll be recording my poker winnings closely and keeping what reciepts I can. don't want the tax man to think i'm making cash Tshirt sales then passing them off as winnings

excellent, when are you planning to emigrate?


_{sorry (below the belt) sorry}

Adam, I'm sure that if you told the taxman that, for example, the £100,000 that you had was not from T-shirt sales, he'd believe you...

Gambling earnings are definitely tax free whether or not you have another job.  The hassle free way to get an ITIN number is as earlier indicated - play at the Bellagio and they will do it for you right away for no charge.

if / when I pick up a 100k win I might struggle to motivate myself to keep going with the shirts. ;)

rest assured. your winnings gained through gambling are none taxable and you dont have to declare them.  I have been through this with the tax office and NI people.


-the end-

Just to clarify my previous comments.

Americans pay tax on their global income.

UK citizens pay tax on their global income (you are supposed to pay tax and declare interest on all those overseas bank accounts).

The way the tax laws are worded you do not pay tax on gambling winnings in the UK as long as it is not your only source of income.

Even if it is your only income they are reluctant to tax you because to do so they would have to allow you to offset expenses and more importantly losses. As mosdt people lose it would set a disastrous precedent for the tax office as everyone would then start offsetting all their gambling losses.

A STRICT interpretation of the law only exempts gambling winnings if they are not your only income but the reality is a little fuzzier. I shall try and find the exact wording.

As I said in my first post....

I feel sorry for the Americans!

 O0

I see, so in theory if your gambling winnings are your only source of income you can be taxed but as it would lose them money once you offset them against hotel bills, fuel etc and losses they'd lose money and it would be horribly complicated to administer and police


another triumph of expediency over principle!!

Well, well.well,    I can tell you that when I won my WSOP event this year I actually had a silent partner playing w/ me?????

THE IRS, TAX MAN, SNEAKY UNCLE PETE, UNCLE SAM, what ever you want to call him.

I will pay about a 30% tax on my poker PROFITS for the year >:D

So when I buy into a $10,000 event during the rest of 2005 I am really only paying $7,000 because if I lose I dont pay taxes on that $10,000 because it comes of my PROFIT for the year 2005 and reduces my tax liability ;D

I think it is a crock of xxxx, but good old uncle sam will always be my "silent" business partner.

The Rookie and his partner SAM

Does this mean you'd still have an obligation to declare?

My accountant is ex Inland Revenue and pretty much a friend of the family. He spoke to two of his ex colleages and checked the laws etc and nothing has been mentioned about it shouldn't be your only source of income or any fuzzy areas. This thread has reminded me that I need to give him my tax form but nothing I'm sure will be written on it about my poker winnings.

Snoopy, now that seems like an excellent question


I know that in "normal" life if the taxman does not send you a tax return but you have something to declare it is not his responsibility to send you the form, you are responsible for asking for it


but the implication of Posts by Junior, At-It, Byron and others are that here you do not have to declare

if you did have to pay tax on your winnings i think the tax man owes me about 3 grand  :)up

How much can I charge him if my aces get busted?

No tax declaration is necessary for UK citizens in the event of income derived by gambling!

Can you imagiine if a lottery winner suddenly declared that they were a professional lottery player?

Its all tax-fee boys & girls...so enjoy!

Only those daft Americans have to pay...so much for democarcy!

easy on us, we only do some things right O0 I think playing poker is one of them >:D

2005 WSOP PLH WORLD CHAMPION  (JUST KIDDING)

reasonable HU game too, shows promise ;)

VERY NICE, NOW WHEN I GET THERE IN OCT I EXPECT A REMATCH

would love to, If you win, I might even let you join the Nottingham Heads Up B team.

To the guys who showed an interest in that, we will try and get that HU match organised by the way

btw Brian, I liked your interview on poker 425

I can't seem to find the exact wording in the tax laws but the laymans version doesn't mention anything about sole income BUT.......

Two friends, one a professional poker player and the other a professional sports bettor approached the inland revenue in the past 2 years and they were specifically told that they had to have alternative incomes.

However this whole argument about whether gambling winnings should be taxable is a tricky one. As income there is no reason for it not to be taxed and we are FORTUNATE in the UK that it is not taxed as most other places do tax it whilst many countries do not have legislation that specifically cover it.

However to those that advocate that gambling winnings should be taxed I would say this.

If you are going to tax gambling winnings then you will have to allow losses to be offset against those winnings in any tax year. If you are going to do that then you will also have to allow Joe Average who goes into his local bookies and loses £20 a week to offset his £1000 per year losses against his other income tax thorugh his normal daytime job. To not permit this would be to make a law that discriminates eg Tax only men and not women as you would be saying that gambling is not taxable and only winning gambling is taxable and there would be very strong legal argument for anyone to offset any gambling losses against any form of income tax. As most lose then the net result is a massive deficit for the Inland Revenue and the government.

I'll still keep searching for the specific wording in the tax laws.

I dont get poker 425 here in sunny Florida, I will take your word on it >:D 4s 7d

It was the interview we did in your suite at The Rio, Brian. Good stuff. Poker 425 will put the interview up on Windows Media Plsyer & Real Player in a few days, & I'll post you a link.

By the way, Brian has agreed to write some strategy articles for us (that should be a laugh!) and some American Tournament Reports, should be worth a read. So nag him guys, to make sure he does.

Finally....Brian is a BIG friend of blonde. When he's over here in October for the William Hill Grand Prix, we hope to get him out and about to some of the Regional Casinos, Notts, Walall, etc, so you guys can meet the great man, & maybe play a little heads-up with him. He really is an extraordinary character.

bring Brian to a Friday in Luton please Tony

although Tuesday's rookie night might be more his style

man, we have to get Brian to a tuesday night beginners night at the Notts Gala. I'll give him that HU rematch he's beggin for (double or quits with the bracelette as a sweetner?)

i asked first...


everyone else is re-raising with 74 off, I'd like to see him in it too

sounds like alot of fun, see ya in Oct

crikey, is he telepathic?

only just, ok what about the sunday afternoon £30 freeze (starting this sunday) followed by the £50 rebuy in the evening.
slot the HU game in between.

no, or he'd have passed his top pair no kicker to my check raise ;)

I will leave the scheduling to Tikay, I just show up and play