There were several comments on my January 26 blog about a new tax app. One said: It wasn’t that long ago that the IRS said you had to keep paper records. You could then transfer them into electrons, but the initial record had to be on paper. So check with your tax person before using this [app] as your primary recording mechanism.
I posed this question to Marissa Chien, my co-author of Tax Help for Gamblers. Here is her answer: “The IRS has never said records have to be on paper. They only had to be contemporaneous. Of course, the only option was paper until the advent of iPhones, Blackberrys, etc.”
And as another reader commented, the Apple ap I talked about can produce paper records if needed.
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Another reader ask this question: Thanks for the [tax] information, Jean! Are you able to share how you and Brad came out on your IRS audit?
I am happy to say that the audit was resolved to our satisfaction. It took a bit of time “educating” several IRS employees about professional vs. recreational gambling, but I finally got the official notice that we did not owe anything. I had always been pretty sure I would “win,” but with the IRS, one never knows for sure until you get that resolution letter!
IRS should be lioable for triple your costs in time and actual hired assistance. It sounds like they just went in swinging with nothing more than \she said professional gambler\ as probable cause. I imagine they don’t need probable cause as the police do, but that does not make it right. All that means is that the law allowing them to make unfounded accusations is deeply flawed.