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Track Collector
11-10-2008, 04:46 PM
Currently my wagering activity is reported on schedule "C" of the Federal Tax Return under my individual social security number. I am weighing the option of forming a separate entity which would lead to the creation of a new, separate tax identification number.

If I were to complete this process before the end of the year, would I have the option to report all the year-2008 activity under that new id#? (Similiar to when a person marries in December, the tax laws consider them married the whole year and allow them to file a joint return.) Please consider that all aspects of my racing business (level of activity, documentation of wagers, etc.) will remain unchanged with the exception of the new tax id#, and that I have only one W-2G signer form associated with my personal social security number.

Thank you for any comments and advise from those with experience of having their wagering activity under a separate tax entity and/or those with tax preparation experience in this specialized area!

Track Collector

rrbauer
11-10-2008, 05:27 PM
It's not clear to me that the IRS will give you a new, separate tax ID to be used for something that you have been using your personal ID for. They have become very picky about issuing those ID's anymore. (I have one but don't use it for my gambling activities which I do on Sched C). And, in the case of 2008, if you've had W2G forms issued to your personal ID then getting those changed may not be possible. I don't see any advantage to the separate ID.

jonnielu
11-10-2008, 05:49 PM
Currently my wagering activity is reported on schedule "C" of the Federal Tax Return under my individual social security number. I am weighing the option of forming a separate entity which would lead to the creation of a new, separate tax identification number.

If I were to complete this process before the end of the year, would I have the option to report all the year-2008 activity under that new id#? (Similiar to when a person marries in December, the tax laws consider them married the whole year and allow them to file a joint return.) Please consider that all aspects of my racing business (level of activity, documentation of wagers, etc.) will remain unchanged with the exception of the new tax id#, and that I have only one W-2G signer form associated with my personal social security number.

Thank you for any comments and advise from those with experience of having their wagering activity under a separate tax entity and/or those with tax preparation experience in this specialized area!

Track Collector

Why don't you put your wagering activity under you American citizenship so that there is no income tax on any proceeds that there may be.

Putting your wagering activity under an entity that has elected for taxable status could be a very negative move, because then you are partnering up with the fed. government in your wagering, the same way that you did with your job.

jdl

jonnielu
11-10-2008, 06:08 PM
It's not clear to me that the IRS will give you a new, separate tax ID to be used for something that you have been using your personal ID for. They have become very picky about issuing those ID's anymore. (I have one but don't use it for my gambling activities which I do on Sched C). And, in the case of 2008, if you've had W2G forms issued to your personal ID then getting those changed may not be possible. I don't see any advantage to the separate ID.

They will give an ID# to any entity that is ignorant enough to apply for one. Because that application is taken as your election for a federal taxable status. It also represents your authorization for the tax to be applied to you and/or your winnings, where it otherwise may not.

There is one person that has the authority to determine what income/person is taxable and what income/person is not. That person wields the highest authority in our nation.

If you ever want to know who that person is, just read the name on the signature line of any IRS document. To discover that person is you.

But, of course, don't take my word for it, first go read the instructions for form W2-G, where it say, a foriegn person is NOT subject to withholding on gambling winnings. That just prooves that there are entities NOT subject to the tax code. Maybe you should form one of those entities.

It is commonly known as, citizen. Try that entity, you may like the benefits.

GameTheory
11-10-2008, 06:08 PM
A related question about taxes: How do you categorize rebates? Are they winnings? Or do you just subtract them from the original wager amount since that money wasn't actually at risk?

Pace Cap'n
11-10-2008, 07:27 PM
In order to report gambling winnings and losses on Schedule C, one must qualify as a "Professional Gambler". In short, gambling must provide most, if not all, of your income, and most, if not all, of your effort must be directed to gambling activities.

Any other income, such as wages reported on W-2's, may call one's status as a professional gambler into doubt.

Also, any change in the tax reporting status of an individual (such as TIN) may subject a return to further scrutiny.

Track Collector
11-10-2008, 08:11 PM
They will give an ID# to any entity that is ignorant enough to apply for one. Because that application is taken as your election for a federal taxable status. It also represents your authorization for the tax to be applied to you and/or your winnings, where it otherwise may not.

There is one person that has the authority to determine what income/person is taxable and what income/person is not. That person wields the highest authority in our nation.

If you ever want to know who that person is, just read the name on the signature line of any IRS document. To discover that person is you.

But, of course, don't take my word for it, first go read the instructions for form W2-G, where it say, a foriegn person is NOT subject to withholding on gambling winnings. That just prooves that there are entities NOT subject to the tax code. Maybe you should form one of those entities.

It is commonly known as, citizen. Try that entity, you may like the benefits.

Sorry, but current history does not support the "it is unconstitutional to have to pay taxes" theory. I'll guess I'll be "foolish" as I will continue to report the income. I'm not interested in being made an example by the IRS with heavy fines.

cj
11-10-2008, 08:13 PM
Sorry, but current history does not support the "it is unconstitutional to have to pay taxes" theory. I'll guess I'll be "foolish" as I will continue to report the income. I'm not interested in being made an example by the IRS with heavy fines.

I don't think I'd be coming here for tax advice. No offense to the posters, but you need a good accountant familiar with handling a professional gambler.

Track Collector
11-10-2008, 08:26 PM
A related question about taxes: How do you categorize rebates? Are they winnings? Or do you just subtract them from the original wager amount since that money wasn't actually at risk?

Rebates are not winnings, but they are reportable other income.

For example, your activity for the year could be like the following:

Total Wagers = $ 5000
Total Winnings Returned = $ 5500
Rebates = $ 250

Your total reportable income would be (5500-5000) + 250 = $ 750.

jonnielu
11-10-2008, 08:40 PM
In order to report gambling winnings and losses on Schedule C, one must qualify as a "Professional Gambler". In short, gambling must provide most, if not all, of your income, and most, if not all, of your effort must be directed to gambling activities.

Any other income, such as wages reported on W-2's, may call one's status as a professional gambler into doubt.

Also, any change in the tax reporting status of an individual (such as TIN) may subject a return to further scrutiny.

Several more reasons to remove you wagering activities from the jurisdiction of the tax code.

Take note of the threat implied, it speaks volumes on the lack of authority that IRS has.

jdl

jonnielu
11-10-2008, 08:49 PM
Sorry, but current history does not support the "it is unconstitutional to have to pay taxes" theory. I'll guess I'll be "foolish" as I will continue to report the income. I'm not interested in being made an example by the IRS with heavy fines.

I have no theories on the federal income tax. If you do not wish to question, by all means, send the money in.

jdl

jonnielu
11-10-2008, 08:52 PM
I don't think I'd be coming here for tax advice. No offense to the posters, but you need a good accountant familiar with handling a professional gambler.

Now why would you figure that I don't know my way around the tax code?

jdl

cj
11-10-2008, 08:53 PM
I'm sure "jonnielu" told me it was OK would hold up upon audit.

jonnielu
11-10-2008, 09:01 PM
I'm sure "jonnielu" told me it was OK would hold up upon audit.

Why would there be an audit? I was audited in 1982, but not since. You might be totally shocked by what will hold up.

jdl

GameTheory
11-10-2008, 09:31 PM
In order to report gambling winnings and losses on Schedule C, one must qualify as a "Professional Gambler". In short, gambling must provide most, if not all, of your income, and most, if not all, of your effort must be directed to gambling activities.

Any other income, such as wages reported on W-2's, may call one's status as a professional gambler into doubt.Since when? As long as you run your gambling as a business with all the appropriate records it doesn't have to be your sole or even main source of income. (It can even lose money some years.) It's a business like any other.

cj's dad
11-10-2008, 10:49 PM
I smell another thread ruination in progress.:lol:
I'm sure "jonnielu" told me it was OK would hold up upon audit.

Pace Cap'n
11-10-2008, 10:53 PM
Only a Professional Gambler may report wins and losses on Schedule C (p & L from business).

The determining court case is:

Commissioner of Internal Revenue v. Groetzinger

No. 86-1226

supreme.justia.com/us/480/23/case.html (http://supreme.justia.com/us/480/23/case.html)

A good summary of the requirements are presented in this article from Cardplayer Magazine...


1. Gambling activity must be done full time with regularity and continuity. Sporadic activity does not qualify. 2. Gambling activity must be done with the expectation of making income to support yourself. Note that a professional gambler may have another source of earned income, but a significant source must come from gambling.

3. You must show a profit in three out of five consecutive years. This rule is applied by the IRS to distinguish businesses from hobbies or recreational activities.

4. You must act like a business. The IRS requires businesses to accurately maintain a set of books (an inexpensive personal computer checkbook or personal finance program should be sufficient). Additional items that can help support your position that you qualify are listed below:


www.cardplayer.com/magazine/article/13444 (http://www.cardplayer.com/magazine/article/13444)

Track Collector
11-10-2008, 11:37 PM
Why would there be an audit? I was audited in 1982, but not since. You might be totally shocked by what will hold up.

jdl

No disrespect intended. Please enlighten me here. What may hold up that I would be shocked by, something like not reporting net gambling winnings? How about some specifics so that I can understand the advice you tried to give me when responding to this post.

PaceAdvantage
11-11-2008, 02:50 AM
I'm sure "jonnielu" told me it was OK would hold up upon audit.Now THAT was funny.

jonnielu
11-11-2008, 11:27 AM
Only a Professional Gambler may report wins and losses on Schedule C (p & L from business).

1. Gambling activity must be done full time with regularity and continuity. Sporadic activity does not qualify. 2. Gambling activity must be done with the expectation of making income to support yourself. Note that a professional gambler may have another source of earned income, but a significant source must come from gambling.

3. You must show a profit in three out of five consecutive years. This rule is applied by the IRS to distinguish businesses from hobbies or recreational activities.

4. You must act like a business. The IRS requires businesses to accurately maintain a set of books (an inexpensive personal computer checkbook or personal finance program should be sufficient). Additional items that can help support your position that you qualify are listed below:



So in other words, or hopefully put in a way that you can see what is actually going on here:

YOU must thoroughly establish/show/evidence/prove/determine that your gambling activities are conducted as a Business (an entity that would more likely be within the jurisdiction of the federal tax code), as opposed to a personal hobby. (in which mode, your gambling activity could be outside the jurisdiction of the federal tax code).

If YOU will do the determining, in a way that that there could be no question, as suggested above. That would leave no determination for IRS to make.

Which is the only way that they can empty your pockets, because they do not have the authority to make any determinations in the first place. The best they can do is to coerce you into making the determination with your own authority, and do so in a way that you are fearful enough to comply without question and determine in the way that benefits them.

Has an officer or official of the federal authority ever told YOU directly that YOU are within the jurisdiction of the federal tax code? Think about that for a minute. Because there is a reason that the answer is no.

That reason is that no one has the authority to determine your status except for YOU.

Of course, don't take my word for it, take a minute here on veteran's day to honor all of those that have put their lives on the line in the interest of preserving your Liberty and Constitution.... by sending a letter to the Secretary of Treasury, asking for his determination of your status for federal taxation.

jdl

Pace Cap'n
11-11-2008, 11:48 AM
This thread was not started to debate the validity of the tax code, which makes all of your replies "off-topic".

cj
11-11-2008, 11:57 AM
This thread was not started to debate the validity of the tax code, which makes all of your replies "off-topic".

Good point. I'm sure all the tax evaders in prison take solace in his posts though.

jonnielu
11-11-2008, 12:07 PM
No disrespect intended. Please enlighten me here. What may hold up that I would be shocked by, something like not reporting net gambling winnings? How about some specifics so that I can understand the advice you tried to give me when responding to this post.

One thing holds up beyond all assault, your authority as established by the Declaration of Independence, and the Constitution.

The IRS can not even deal with you until you sign that authority over to them.

Have you ever required an IRS agent to prove authority/jurisdiction in relation to you?

jdl

jonnielu
11-11-2008, 12:10 PM
This thread was not started to debate the validity of the tax code, which makes all of your replies "off-topic".

Sorry, I was asked a question, having to do with the topic, so I gave an answer.

I'm not debating the validity of the tax code either.

jdl

jonnielu
11-11-2008, 12:18 PM
Good point. I'm sure all the tax evaders in prison take solace in his posts though.

You go well out of your way to imply that I don't know anything about anything, why is that?

cj
11-11-2008, 12:21 PM
You go well out of your way to imply that I don't know anything about anything, why is that?

I wasn't implying that at all. I just don't think you are giving very good advice. People do go to jail and lose their homes, cars, etc. for not paying taxes. My advice was to get a tax attorney. Are you one?

jonnielu
11-11-2008, 12:53 PM
I wasn't implying that at all. I just don't think you are giving very good advice. People do go to jail and lose their homes, cars, etc. for not paying taxes. My advice was to get a tax attorney. Are you one?

Don't I usually say, don't take my word for it? If I am offering advise, is not the advise to make the effort to discover the truth for yourself.

Some people are in jail for not paying the federal income tax, a much higher number of people run over each other in the effort to get to the mailbox by April 15th to send half of their money to D.C., then there is a number of people that aren't in jail, or running to the mailbox either.

Which group would you figure, might have the most knowledge of how the system works?

No, I am not a tax attorney. I'm too honest for that profession.

jdl