Re: Self Employment Income of Gambling Winnings

Posted by webmaster on August 6, 2007, 10:33 pm

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> webmas...@onfirebikinis.com wrote:

>> Recently the IRS notified me that they changed my 2005

>> return. They took my gambling winnings of $60,000, which I

>> had indicated on line 21 (Other Income), and decided to call

>> this self employment income. The result is a new tax bill

>> of $8,000.

>> IRS specifically states in their tax guide that gambling

>> income is to be stated on line 21. Thus, how can they now

>> justify calling this self employment income when I did

>> exactly as they reference in their tax filing instructions?

> After thinking about this some more, the questions are how

> did you win $ 60,000 and how much earned income did you have

> from your stated oddupation?

> The IRS has a fairly sucessful history of fighting claims

> of "Professional Gambler" as an occupation. There are no

> professional Lottery, Keno, Slots, or Craps players. But

> there are professional Blackjack and Poker players. In the

> latter two, you would have expenses to get to and stay at

> casinos - unless you were playing at home on the Internet

> or even worse running the game at your home.

> Without a full understanding of the facts, I suspect you're

> going to need a tax professional with audit experience!

> Adams' Rule #1: NEVER represent yourself before the IRS.

I appreciate all the responses.

I was notified by a letter in which I was given 30 days to
respond. The winnings came from sports betting, mostly
football. My income apart from the sportsbetting was only
around $12,000. When I state $60,000 in winnings that is
after subtracting all my losses.

Moderator:
If you're netting $60,000 a year from sports betting,
we need to become close personal friends. <g>

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