Evading the Taxman

[dnlgfnk]

A player hits a hypothetical superfecta necessitating a withholding tax for a dollar ticket, but came in under the withholding amount due to purchasing multiple 10 cent tickets.
If the player presents all of the 10 cent tickets to a teller at the track as a single transaction, does the track still attempt to hit the player with the withholding tax?

[Robert Goren]

There is no "attempt" about it. They do it. They are doing what the law says they must do. The time to deduct losses is when you file your taxes. It is apparent that you don't the rules and laws about this. If you going to play in pools that require signers, you should find out exactly what those rules are now. The IRS wants things done a certain way. You need to know what that way is and do it that way. It will save you a lot of headaches. I am not saying their way is what most people would consider the fair way, but they make the rules. So it is their way or a lot of problems. There is almost no end to stories of problems that posters here have had with the IRS. Very few have come out the winner in their battles with the IRS.

[dnlgfnk]

Since in my hypothetical the 10 cent tix are below the amount of return requiring a tax, I can simply present each of the winning 10c tix one at a time, at different times and windows to avoid being taxed. My question asked if this was necessary given the 10c denomination, i.e. no single $1 ticket putting me over the taxable limit.

[startngate]

Since in my hypothetical the 10 cent tix are below the amount of return requiring a tax, I can simply present each of the winning 10c tix one at a time, at different times and windows to avoid being taxed. My question asked if this was necessary given the 10c denomination, i.e. no single $1 ticket putting me over the taxable limit.If you were to cash each ticket separately then the track would not do the withholding and/or reporting.

Having said that, as far as the actual tax liability goes, it doesn't matter whether or not any withholding or reporting was actually done. As Robert mentioned, by law your are still required to report any gambling winnings when you file your taxes so the tax liability is still there. You can deduct losses up to the amount of your winnings to off-set it, providing of course you have documentation to back it up.

Does everyone report all their gambling winnings? Likely not ... but that's up to the individual to decide. ;)

[precocity]

If you were to cash each ticket separately then the track would not do the withholding and/or reporting.

Having said that, as far as the actual tax liability goes, it doesn't matter whether or not any withholding or reporting was actually done. As Robert mentioned, by law your are still required to report any gambling winnings when you file your taxes so the tax liability is still there. You can deduct losses up to the amount of your winnings to off-set it, providing of course you have documentation to back it up.

Does everyone report all their gambling winnings? Likely not ... but that's up to the individual to decide. ;)
you mean irs tickets? thats all you haft to report, If i bet 200 to win and get back 1500 that's my business not the IRS..

[Steve 'StatMan']

you mean irs tickets? thats all you haft to report, If i bet 200 to win and get back 1500 that's my business not the IRS..

Well, according to the IRS, you're supposed to report all gambling winnings. However, unless you've hit for a signer, they will be unlikely to know of other wins. But I would suspect that if you had quite a few signers, and were audited, you would get asked "You mean you won nothing but bets you had to sign for all year?" so consider your situation, and have losing tickets available at a minimum. (By the way, DO NOT present losing tickets that have foot prints on them.)

Also, one has to wonder, when using rewards cards that track all bets, like Twin Spires rewards, and online betting accounts where all bets are on record, whether the IRS will lean on the them and demand records of all bets, or at least all the bets of anyone who had a signer. I don't think they do that, but there is always that potential threat.

[dnlgfnk]

I get all of the ethical implications and IRS requirements. My central question is, "Do I have anything to fear by presenting , say, 10 different 10c tickets to the teller all at one time, which individually do not compel him to whip out IRS paperwork, but collectively would?"

[dnlgfnk]

...which obviously to him are from the same race?

[precocity]

I get all of the ethical implications and IRS requirements. My central question is, "Do I have anything to fear by presenting , say, 10 different 10c tickets to the teller all at one time, which individually do not compel him to whip out IRS paperwork, but collectively would?"
NO if its less than 600 on the 10cent super NO. about 2 weeks ago i hit at fairgrounds 4 separate 10c super for 250 each..my bad 217 each
2011-12-08 11:09:57 Bet* Fairgrounds 2 Superfecta $0.10 1+5+7+8+9 $12.00 $217.50
2011-12-08 11:10:02 Bet* Fairgrounds 2 Superfecta $0.10 1+5+7+8+9 $12.00 $217.50
2011-12-08 11:10:04 Bet* Fairgrounds 2 Superfecta $0.10 1+5+7+8+9 $12.00 $217.50
2011-12-08 11:10:07 Bet* Fairgrounds 2 Superfecta $0.10 1+5+7+8+9 $12.00 $217.50

[dnlgfnk]

Thanks and nice play, Precocity.

[AndyC]

I get all of the ethical implications and IRS requirements. My central question is, "Do I have anything to fear by presenting , say, 10 different 10c tickets to the teller all at one time, which individually do not compel him to whip out IRS paperwork, but collectively would?"

The track is required to aggregate all of your identical tickets for purposes of determining reporting and withholding requirements. Clearly cashing the tickets one at a time will prevent some unwanted paperwork.

[precocity]

Thanks and nice play, Precocity.
had a good feeling and kept hitting repeat... :lol:

[Robert Goren]

Well, according to the IRS, you're supposed to report all gambling winnings. However, unless you've hit for a signer, they will be unlikely to know of other wins. But I would suspect that if you had quite a few signers, and were audited, you would get asked "You mean you won nothing but bets you had to sign for all year?" so consider your situation, and have losing tickets available at a minimum. (By the way, DO NOT present losing tickets that have foot prints on them.)

Also, one has to wonder, when using rewards cards that track all bets, like Twin Spires rewards, and online betting accounts where all bets are on record, whether the IRS will lean on the them and demand records of all bets, or at least all the bets of anyone who had a signer. I don't think they do that, but there is always that potential threat.I would rule out that out in these of increased vigilance do to 9/11. After all the GOP whip in the senate has publicly state that he thought that online poker was being used to fund terrorists even though he had no proof. It is a small step from that kind of logic to thinking that race tracks are being used too. I don't like any of it, but I believe that it is going to more absurd before it gets better. If I was trying to stay one step ahead of the tax man, I would not want any "paper" trail. Just saying.

[classhandicapper]

Also, one has to wonder, when using rewards cards that track all bets, like Twin Spires rewards, and online betting accounts where all bets are on record, whether the IRS will lean on the them and demand records of all bets, or at least all the bets of anyone who had a signer. I don't think they do that, but there is always that potential threat.

You may have just identified a marketing strategy that will get people back to the track using cash again. :lol:

[Goofyscott]

Nice Job Precocity!!

NO if its less than 600 on the 10cent super NO. about 2 weeks ago i hit at fairgrounds 4 separate 10c super for 250 each..my bad 217 each
2011-12-08 11:09:57 Bet* Fairgrounds 2 Superfecta $0.10 1+5+7+8+9 $12.00 $217.50
2011-12-08 11:10:02 Bet* Fairgrounds 2 Superfecta $0.10 1+5+7+8+9 $12.00 $217.50
2011-12-08 11:10:04 Bet* Fairgrounds 2 Superfecta $0.10 1+5+7+8+9 $12.00 $217.50
2011-12-08 11:10:07 Bet* Fairgrounds 2 Superfecta $0.10 1+5+7+8+9 $12.00 $217.50

[cj]

Forgetting all the other stuff, I believe if you present all those tickets at once you would be asked to fill out paperwork. If you aren't, the teller isn't doing his job.

I'd be surprised if a W2G isn't created for precocity as well. If it isn't, Twinspires isn't following the law.

[AndyC]

Forgetting all the other stuff, I believe if you present all those tickets at once you would be asked to fill out paperwork. If you aren't, the teller isn't doing his job.

I'd be surprised if a W2G isn't created for precocity as well. If it isn't, Twinspires isn't following the law.

Exactly. If you look at the attached W2G you can see where box 7 shows winnings from identical wagers. The instructions on page 2 state that identical wagers are considered for determining reporting and withholding requirements.

[baconswitchfarm]

I have one adw that does not lump the same tickets. Everywhere else i have ever bet does.

[precocity]

Forgetting all the other stuff, I believe if you present all those tickets at once you would be asked to fill out paperwork. If you aren't, the teller isn't doing his job.

I'd be surprised if a W2G isn't created for precocity as well. If it isn't, Twinspires isn't following the law.
cj went to the track and did the same thing on a 50c tri went to different tellers at different times but straight cash homey!!!! don't get me wrong got plenty of w2g this year still waiting for somebody to post who got popped for this? not me...

[precocity]

Nice Job Precocity!!
what up scott :cool:

[CincyHorseplayer]

An ADW would probably catch it.Ask the few on here that run them.Ontrack though,I have done this.

[edmond1]

Lucky to be Canadian.....Can't believe the b.s. you have to put up with...

[cj]

cj went to the track and did the same thing on a 50c tri went to different tellers at different times but straight cash homey!!!! don't get me wrong got plenty of w2g this year still waiting for somebody to post who got popped for this? not me...

Of course if you go to different tellers and don't admit you have other tickets the same you won't get popped. The question was if you go to the same teller and present them all, what happens. It is an easy answer.

[dansan]

I cashed a signer without any thing with SSI # on it 2 years ago could of lied but didnt tellers arent supposed to do that

[thaskalos]

I cashed a signer without any thing with SSI # on it 2 years ago could of lied but didnt tellers arent supposed to do that
Tellers do whatever they want.

About 2 weeks ago, at my local OTB, I had two winning 10-cent superfecta tickets in the 9th race at the Fairgrounds. The superfecta paid $1,360 for a dime.

I went to the teller window to cash the voucher that I was playing with, and I casually told the teller that I also had a signer to cash...but didn't have my SSN with me.

The teller quickly glanced around the room, and proceeded to inform me that there were two people in the place who would be interested in cashing the tickets for me...if I was willing to pay the "going" price.

I thanked the teller for his help, but told him that I wasn't comfortable doing that...since I didn't know either of these two people well enough.

[garyscpa]

Well, according to the IRS, you're supposed to report all gambling winnings. However, unless you've hit for a signer, they will be unlikely to know of other wins. But I would suspect that if you had quite a few signers, and were audited, you would get asked "You mean you won nothing but bets you had to sign for all year?" so consider your situation, and have losing tickets available at a minimum. (By the way, DO NOT present losing tickets that have foot prints on them.)

Also, one has to wonder, when using rewards cards that track all bets, like Twin Spires rewards, and online betting accounts where all bets are on record, whether the IRS will lean on the them and demand records of all bets, or at least all the bets of anyone who had a signer. I don't think they do that, but there is always that potential threat.

Rewards cards at the track I go to only record amounts bet, not the record of the actual bet. At least that's what they told me.

[ElKabong]

Exactly. If you look at the attached W2G you can see where box 7 shows winnings from identical wagers. The instructions on page 2 state that identical wagers are considered for determining reporting and withholding requirements.

Andy,
A question for you or one of the other CPA's (or anyone who knows for certain)

Situation:
Let's say you hit a decent# of pick 3/4/6's for signers @ the track. You can't deduct the cost of a winning ticket- it goes into the machine, never to be seen again. So perhaps one way to claim a deduction on each winning race is to place multiple tix(?)

Hypothetical:

You place two tix on a pick 4 race at SA

1-1-1-1,2 (winner, pays $601 on a $1 payout)
1-1-1-3,4 (loser)

Question:
Can you deduct that losing ticket for the $2 value on your tax return?

[pondman]

A question for you or one of the other CPA's (or anyone who knows for certain)


Can you deduct that losing ticket for the $2 value on your tax return?

If you demonstrate gambling as a profession, you are able to expense losing tickets against gambling income, up to the amount of the income. This may include travel expenses. In addition the gambling losses do not need to come from horse racing. It can be any gambling. If you win at the track, and drop it in a casino it can be an expense.

[pondman]

An ADW would probably catch it.Ask the few on here that run them.Ontrack though,I have done this.


ADW's are the eyes and ears for the IRS. If you are money laundering with anything more than $600, you're going to get caught. It's not going to matter if you have signers or not. Volume will be reported.

[Robert Goren]

I cashed a signer without any thing with SSI # on it 2 years ago could of lied but didnt tellers arent supposed to do that I hope you check the numbers on your tickets before leave when you bet with that teller.

[michiken]

If you have multiple signers and are at the track, the obvious answer is to go to different SAM machines and get separate vouchers. If the bet is under $602, the machines will not trigger an IRS ticket.

Take these to the cashier and just don't exceed 5k. Go to multiple tellers or save some of these cash vouchers for your bankroll or the next week(s).

[AndyC]

Andy,
A question for you or one of the other CPA's (or anyone who knows for certain)

Situation:
Let's say you hit a decent# of pick 3/4/6's for signers @ the track. You can't deduct the cost of a winning ticket- it goes into the machine, never to be seen again. So perhaps one way to claim a deduction on each winning race is to place multiple tix(?)

Hypothetical:

You place two tix on a pick 4 race at SA

1-1-1-1,2 (winner, pays $601 on a $1 payout)
1-1-1-3,4 (loser)

Question:
Can you deduct that losing ticket for the $2 value on your tax return?

There is no requirement that you have a losing ticket in order to be able to deduct a loss. But you sure as heck better have some pretty good evidence that you, in fact, made the losing bet that you deducted. Keeping a diary of your betting activities would be good evidence. Bets that are unusual in size or out of character for your normal betting should probably be backed up by a ticket. A person who normally plays a $32 P-6 would certainly draw questions over a $1,064 ticket. It certainly would help to make a copy or a scan of a winning ticket that had multiple losing bets on it as well.

Personally I try to do almost 100% of my betting through an ADW. I never fear an audit and I can deposit winnings in the bank or brokerage account without worrying about having to explain the source.

[PaceAdvantage]

This isn't the same AndyC from the old Prodigy horse racing boards, is it?

[cosmicway]

Gambling tax is diabolical.
What about when we lose ?

Consider this:
I spend 2000 dollars to buy flashlight screwdrivers, soviet dolls, transistor radio swiss blades and sell them downtown in a wheelcart. I make 3500 bucks, then the taxman comes and collects 3200 from me. All the trouble for 300 bucks. But it was 1500 bucks surely won by me, so let the communist government grab the 73%. I earned something.

In the case of horse racing they are taxing my losses !

Again, if the communist government say no more gambling, because it's against Karl Marx, so be it. But they are not. Instead they are taking us for fools.

I don't believe they are making anything out of it, because the crowds are dwindling in numbers.
It's something most of the people don't appreciate. They are fooled. But the moneys in their pockets cannot be fooled likewise. Once they fly in the air, they just fly away and are no more.

[ElKabong]

There is no requirement that you have a losing ticket in order to be able to deduct a loss. But you sure as heck better have some pretty good evidence that you, in fact, made the losing bet that you deducted. Keeping a diary of your betting activities would be good evidence. Bets that are unusual in size or out of character for your normal betting should probably be backed up by a ticket. A person who normally plays a $32 P-6 would certainly draw questions over a $1,064 ticket. It certainly would help to make a copy or a scan of a winning ticket that had multiple losing bets on it as well.

Personally I try to do almost 100% of my betting through an ADW. I never fear an audit and I can deposit winnings in the bank or brokerage account without worrying about having to explain the source.

Andy,
Thank you for the reply (i do keep all dead tix and a detailed log of course). If I am understanding you, whether someone files via sched C (pro bettor) or sched A (recreational), both the losing & winning tickets in my previous post are indeed deductable.

If I'm wrong, please advise.

PA,
Most likely. He's been around quite a long time (Beyer's books, etc)

[AndyC]

This isn't the same AndyC from the old Prodigy horse racing boards, is it?

Prodigy, that was just a couple of years ago, right? Those were the days, back when I could read the PPs without reading glasses.

[AndyC]

Andy,
Thank you for the reply (i do keep all dead tix and a detailed log of course). If I am understanding you, whether someone files via sched C (pro bettor) or sched A (recreational), both the losing & winning tickets in my previous post are indeed deductable.

If I'm wrong, please advise.

You've got it.

[Si2see]

Twin spires does not do it as a taxed wager if multiple tickets are hit. This was my strategy kentucky derby day.

2011-05-07 0814:08 Cancelled_Bet* Churchill 11 Exacta $5.00 8+15+16+17+19 $100.00 $100.00
2011-05-07 08:22:24 Bet* Churchill 11 Exacta $1.00 8+15+16+17+19 $20.00 $164.90
2011-05-07 08:22:28 Bet* Churchill 11 Exacta $1.00 8+15+16+17+19 $20.00 $164.90
2011-05-07 08:22:32 Bet* Churchill 11 Exacta $1.00 8+15+16+17+19 $20.00 $164.90
2011-05-07 08:22:36 Bet* Churchill 11 Exacta $1.00 8+15+16+17+19 $20.00 $164.90
2011-05-07 08:22:39 Bet* Churchill 11 Exacta $1.00 8+15+16+17+19 $20.00 $164.90

I originally played it for $5, then decided to cancel it and play them each for a buck just in case. Also I have hit mutiple tickets at colonial downs same thing. Went to different tellers several times during the summer with 800, 900, 1100 worth of tickets at once all under signers nothing. They will not ask for you to sign anything if the machine does not tell them to

[precocity]

Twin spires does not do it as a taxed wager if multiple tickets are hit. This was my strategy kentucky derby day.

2011-05-07 0814:08 Cancelled_Bet* Churchill 11 Exacta $5.00 8+15+16+17+19 $100.00 $100.00
2011-05-07 08:22:24 Bet* Churchill 11 Exacta $1.00 8+15+16+17+19 $20.00 $164.90
2011-05-07 08:22:28 Bet* Churchill 11 Exacta $1.00 8+15+16+17+19 $20.00 $164.90
2011-05-07 08:22:32 Bet* Churchill 11 Exacta $1.00 8+15+16+17+19 $20.00 $164.90
2011-05-07 08:22:36 Bet* Churchill 11 Exacta $1.00 8+15+16+17+19 $20.00 $164.90
2011-05-07 08:22:39 Bet* Churchill 11 Exacta $1.00 8+15+16+17+19 $20.00 $164.90

I originally played it for $5, then decided to cancel it and play them each for a buck just in case. Also I have hit mutiple tickets at colonial downs same thing. Went to different tellers several times during the summer with 800, 900, 1100 worth of tickets at once all under signers nothing. They will not ask for you to sign anything if the machine does not tell them to
good hit :ThmbUp: looks like we think alike.

[cj]

Twin spires does not do it as a taxed wager if multiple tickets are hit. This was my strategy kentucky derby day.

2011-05-07 0814:08 Cancelled_Bet* Churchill 11 Exacta $5.00 8+15+16+17+19 $100.00 $100.00
2011-05-07 08:22:24 Bet* Churchill 11 Exacta $1.00 8+15+16+17+19 $20.00 $164.90
2011-05-07 08:22:28 Bet* Churchill 11 Exacta $1.00 8+15+16+17+19 $20.00 $164.90
2011-05-07 08:22:32 Bet* Churchill 11 Exacta $1.00 8+15+16+17+19 $20.00 $164.90
2011-05-07 08:22:36 Bet* Churchill 11 Exacta $1.00 8+15+16+17+19 $20.00 $164.90
2011-05-07 08:22:39 Bet* Churchill 11 Exacta $1.00 8+15+16+17+19 $20.00 $164.90

I originally played it for $5, then decided to cancel it and play them each for a buck just in case. Also I have hit mutiple tickets at colonial downs same thing. Went to different tellers several times during the summer with 800, 900, 1100 worth of tickets at once all under signers nothing. They will not ask for you to sign anything if the machine does not tell them to

These would not qualify as "signers" in any case, the odds are too short.

[fmhealth]

Here's an article that's a good summary of this topic.

http://www.smartmoney.com/taxes/income/gambling-and-your-taxes/

[Si2see]

These would not qualify as "signers" in any case, the odds are too short.

Makes sense then. I never knew it had anything to do with odds. I always thought if you hit the ticket for over the 600.00 amount it would be a signer unless multiple combinations ( i.e. hit a pick 5 of 6 pick 6 3 times like I did at in socal a year or two ago because I had 3 horses in the leg I missed )

Either way I still play my tickets in the smallest amounts I can just in case

[delayjf]

Since in my hypothetical the 10 cent tix are below the amount of return requiring a tax, I can simply present each of the winning 10c tix one at a time, at different times and windows to avoid being taxed.

I've wondered how long it might be before the IRS starts tracking these kinds of serial minimum bets - notices that multiple wagers came from the same voucher trail then flags all winning bets as signers. Unless each bet is made with cash or a separate voucher (Purchased with separate money), seems to me it can be tracked.

[AndyC]

Here's an article that's a good summary of this topic.

http://www.smartmoney.com/taxes/income/gambling-and-your-taxes/

It is a good article. Probably the most important point for horseplayers is the ability to report by each session as opposed to bet by bet. What that means is that if you bet $1,000 during a day and get back $1,000 you will report zero. If you go bet-by-bet you will report $1,000 of income and then hopefully write-off the $1,000 in bets as an itemized deduction.