First, a note: I am going to cut off “Comments” on my last blog entry, “What Were They Thinking?” I have kept them open for many days because I am a strong supporter of free speech. But when you get into the subject of religion or politics, there comes a time when the discussion is getting repetitive and many readers will want us to go on to other subjects. So that is what we are going to do.
Gambling and Taxes
Recently there have been discussions about gambling and taxes on some gambling forums, specifically about the “session” method of reporting. I have always warned readers to not take everything they read about taxes on Internet forums as “gospel” since everyone’s circumstances are different – and what one person might get past the IRS, someone else might not because of their differing financial details or varying interpretations by IRS personnel.
I asked Marissa, who helped me in writing Tax Help for Gamblers, about her professional take on this subject: Here is her answer:
Now that the courts have recognized the concept of the “session” method, I think the next battle/court case is going to be what is a “session”? Is it when you leave the machine? Is it when you leave the casino during a day? Is it a day no matter how many casinos you visit? Is it a few-days trip? And then of course someone is going to try and call it all one long “trip” from January 1 – December 31 each year.
The answer is that I really don’t know. If I had to handicap it, I would guess that the IRS wouldn’t let a “session” go beyond a day.
And on a related subject: The fact that you take/keep your hand-pays or cash-outs in slot tickets is totally irrelevant to this issue.
In our tax book, we discuss the subject of “sessions” in detail and how this can provide problems at tax time and give examples of the various ways others have coped with them.