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Old 09-20-2022, 06:58 PM   #1
delayjf
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Tax question

Do ADW report all payments issued to the bettor to the IRS, or do the operate the same way racetracks do?
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Old 09-22-2022, 05:01 PM   #2
bofkentucky
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Pretty sure they report all taxable, but not the complete list for the year..
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Old 09-23-2022, 05:01 AM   #3
lamboguy
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this is a good question! i can't get an answer to this. i ask because the tax laws have changed for people that use Paypal, Vnmo, and Cashapp. i don't know if they got to adw's yet or even if they are going to treat them the same as the above.

i gave up on paypal a few years ago after my account got hacked and it took me 8 months to get my money back that got stolen.
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Old 09-23-2022, 11:02 AM   #4
garyscpa
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Anything they report to the IRS they should also report to you.
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Old 09-23-2022, 04:51 PM   #5
JustRalph
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Quote:
Originally Posted by delayjf View Post
Do ADW report all payments issued to the bettor to the IRS, or do the operate the same way racetracks do?
I got audited in 2003 after having the best year I ever had. They wanted “all bets” not just IRS reportable.

That’s been 20 yrs though. I was told they were going to compare what was reported by Twinspires (Brisnet?) to my filed taxes.

I sent in the spreadsheet that was created online by the ADW and some other stuff that was non gambling related. The auditor canceled my audit after reviewing the paperwork.

You can blame War Emblem for that audit
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Old 09-27-2022, 12:53 PM   #6
Track Collector
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Any specific wagers that require the generation of a W-2G are reported to the government. (As garyscpa indicated, the ADW would also need to notify the bettor of that as well.).

ADWs are only going to report to the authorities the minimum they are required to report, which means normally they do not send the government a bettor's yearly win/loss statement. Technically, a person is supposed to report all income they receive in a given year, including any income that comes from a profitable year handicapping (even if that income does not qualify to be reported on a W-2G). I suspect the government does not go after these because they know that perhaps only 1% of handicappers are consistent winners, and the potential taxes monies they could secure are minimal, and take away resources they could use to go after bigger potential tax cheats.

Similar to JustRalph, I was audited in 2005 because of my racing activities. I knew I was correctly following the law, but it took 3.25 years (when the statute of limitations was set to run out) before the IRS finally ruled in my favor.

My advice: Know the tax laws and keep excellent records. Also seek wise and competent tax council when necessary.
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Old 09-27-2022, 06:57 PM   #7
metro
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Not audited by IRS but by state of KY a couple of decades ago. I had kept all losing tickets but didn’t have a day to day report detailing all wager activity. Told me without that I couldn’t offset losing tickets against the W2s.

Long story short had to hire a tax attorney and have a sit down meeting with them, otherwise it would have gone to some type of appeals court judge where I plead my case. They ended up siding with me. Otherwise I would have owed state about 25k and they “share” their notes with the IRS. Also would gone after previous years as well.

Would have bankrupted me.

Fortunately almost all my wagers are done through an ADW now so it’s easy to show my account detail if audited.
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Old 09-30-2022, 06:06 PM   #8
toddbowker
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ADW's do not report your entire wagering history to the IRS. We only report tickets which qualify for reporting or withholding, which since the tax interpretation change in 2017, rarely happens anymore. We file those electronically, so the IRS has all of them in their system to compare to what you claim.

If subpoenaed, we would have to turn over the entire betting records, but in 7 years at AmericaTab and 12+ years at PTC, I've never had it happen.

I designed our Account History reporting tools at AmericaTab and PTC to allow for a customer to download all of their transactions to a data file to make things easier for audit purposes.
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Old 10-29-2022, 04:02 PM   #9
ThreeHorseEntry
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I was told by my ADW they only report payouts of 600/1 or more.

Specifically asked the question "if I wager and win 1,000 at 1/1, what is reported?" The answer was nothing.
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Old 10-29-2022, 04:07 PM   #10
ThreeHorseEntry
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How do ADWs make their money?

How do ADWs make their money? Do they get a percentage of what is wagered? Is there any impact on them if their customers make or lose money?

Are they all about the same in how they realize revenues?
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Old 10-29-2022, 04:13 PM   #11
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Even if ADW's don't report < $600, I would not bet against the IRS getting any records attached to my name.
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Old 10-29-2022, 04:18 PM   #12
ThreeHorseEntry
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Even if ADW's don't report < $600, I would not bet against the IRS getting any records attached to my name.

600/1 payouts not 600.00. You could win 10k and it is not reported if the odds are < 600/1. As an aside, I was told there are so few winners that it's not worth their time to chase down those few people.
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Old 10-30-2022, 01:08 AM   #13
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600/1 payouts not 600.00. You could win 10k and it is not reported if the odds are < 600/1. As an aside, I was told there are so few winners that it's not worth their time to chase down those few people.

Whatever, you know what I meant.


If you feel confident that the IRS will not pursue you for your winnings at an ADW, go for it.
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Old 10-30-2022, 03:50 PM   #14
ThreeHorseEntry
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Whatever, you know what I meant.


If you feel confident that the IRS will not pursue you for your winnings at an ADW, go for it.

There's nothing the IRS hates more than an honest taxpayer. I was audited by the IRS. It was 4 months long and the longest audit in their field office.

At the end of the audit, the rep told me they couldn't find anything and that Schedule C people on average underreport their income 50%. He implied that he was reprimanded for spending too much time on the case. He also added they wouldn't be back for a long time. I was never audited again and that was a long time ago.

They played all kind of games with me. Calling at odd hours to my home hoping to catch me off guard. Asking for material and when I supplied it they ignored it. Then ask for something else. It made me think they are wasteful people with a bad culture not productive to the taxpayer or the IRS.
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Old 11-01-2022, 02:17 AM   #15
DanBoals
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The last year I bet online was 2015 I think and it was thru Twinspires. I bet a little under $200k that year and Twinspires showed I made about $10k profit. I had some bets that were reported to the IRS by Twinspires, but no one from .gov came knocking. I had made a few bets at Harveys in Tahoe and had some of those that were were reported as well.


I kept all the losing tickets from Harveys and I kept track of everything related to gambling: office space, internet, computers, software, data files, etc. I was ready to show them all my expenses if need be, but it never came to that. Not sure if I was just a small fish, or if there are certain things the computers look for.


I am just getting back into betting this year, and since I live in Reno now, I can no longer bet online unless it is thru a Nevada casino, so the casinos have all my data. It is hard to imagine any situation these days where you could make significant money gambling and the IRS would not know.


If you think the ADWs won't give the government anything they ask for, with or without a warrant you are foolish. Better safe than sorry.
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