shipitfish: (poker-not-crime)

I haven't played poker at all this month. Basically, I've quit. I have more to write about regarding my reasons, and I will. I've won about $20,000 already this year, and assuming that Cake Poker actually pays me (they are having huge delays in processing cashout checks; I've been waiting since mid-February), that will be a win comparable to my best years in the past. Why play anymore when I have better things to do?

That said, I'm still going to have my monthly home game, because the usual group are enjoyable people (not the annoying fish you have to put up with at casino and online tables). I've just sent an announcement for this Saturday.

I did my taxes. I read Ann-Margaret Johnston's book, How to Turn Your Poker Playing into a Business. I recommend this book if the whole Schedule A vs. Schedule C issue still confuses you or if you've never filed one or the other. For those who have studied this issue, it doesn't give any new information.

The only piece that it made clearer to me is why everyone is so touchy about this full-time vs. part-time idea. There is one single court case, once, about a professional gambler, that [livejournal.com profile] jhazen has previously quoted in my journal: if one's gambling activity is pursued full time, in good faith, and with regularity, to the production of income for a livelihood, and is not a mere hobby, it is a trade or business within the meaning of the statutes with which we are here concerned.

Added with Johnston's arguments that the IRS gets very suspicious of a Schedule C for any activity that seems fun, this probably accounts for the constant “not full-time” paranoia around the poker world. I believe that this is one court case, and therefore just one criteria among so many. Johnston herself argues that there are lots of criteria considered by the IRS. Frankly, when I'm playing more than, say, 3 hours of poker a week, I enjoy my day job more than I enjoy the poker, so if the IRS wants to see “toil” to believe it's not a hobby, I'll tell them under oath how boring the whole thing is.

Finally, I should note that I nearly had a losing year in poker in 2006. My net profit was a paltry $94.73, as my expenses were somewhat high ($2,105.73). Still, this is much less than I won in 2005. I had forgotten than in January 2006, I was still playing limit regularly at the $15/$30 level and had a bad 200 big-bet loss weekend. So, given that I had to dig out of that hole all year, I am fortunate that I had a win. It certainly didn't help that I spent most of the late summer and fall playing extremely low stakes, wasting time in tiny home games and very small stakes online, too. There's hours of my life I'll never get back.

shipitfish: (partly-cloudy-patriot)

So, here it is, tax day, and I bet you fudged your poker winnings. I bet you said to yourself: well, only online wins are actually traceable. Maybe you picked up a bunch of discarded betting slips at your local Off Track Betting establishment to “establish” some losses. Maybe you just figure that since that $8,000 you cashed out the last time you were in AC wasn't enough to generate a 1099-G, who will ever know as long as the cash is under your mattress.

Most poker players in the USA cheat on their taxes. It's a mostly a cash business, and records don't get generated unless the wins are really big. Since most pros win small amounts (less than the $10,000 or so that forces generation of a 1099-G), they don't report, or substantially under-report, their winnings.

Every year, I dedicate a post to scold you all. You are doing something wrong. I think it's a true societal injustice.

This isn't to say that I like what the taxes fund. I have my misgivings about income taxes; we all surely do. I looked at the graph in the back of my 1040 booklet this year with revulsion. In 2004, much more of my tax money was spent on national defense than on human development, and more than social programs; this disgusts me. Meanwhile, I think that it's scandalous that individual tax payers have to foot 35% of the federal budget while corporations get more welfare than any of us — they pay only 8% of the budget. You might guess, given my propensity for living in so-called “blue states” that I don't support the current administration (I didn't support the last one, either, for that matter). It's sufficient to say that I have never voted for the candidate who won; my government has never represented me.

But, I still believe it's wrong not to pay your taxes. You can use every argument in the book to say taxes are unjust, but it isn't civil disobedience to simply not pay. If you want to make a statement, enclose a letter with your 1040 saying: “I cheated on these taxes because the income tax system is wrong for the following reasons ...”. So I ask, of those of you that failed to report (or under-reported) your poker income, how many of you did that? If you didn't, then you aren't some sort of tax protester; you're just a thief trying to hide on “high moral ground” that isn't really there.

Keep in mind, all of you, how you made that money this year. You played a game. There are working people, who break their backs every day, or sit in soulless cubicles for 60 hours a week, and pay every last dime in their required taxes. Meanwhile, you made some money while you enjoyed your work. You played a game to earn that cash. I believe that gives you an even stronger obligation to pay up. (And, although it's off-topic, I'll note that if you didn't have fun while winning at poker in 2005, you may want to consider giving up the game and finding something else to do.) You have no right to ask those working people to carry more than their fair share while you get lucky because you're in a “cash business” and can evade the auditors indefinitely.

Ok, so there again is my annual rant about how poker players should be honest on taxes. For those of you that were honest, I commend you for doing the right thing. For those who weren't, may your guilt consume you and convince you to do the right thing next year. :)

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shipitfish

November 2016

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