Re: [vpFREE] Help! IRS says I owe money

>Has anyone else dealt with this problem?:
>
>- In 2007, I kept a pretty good gambling journal, which showed winning days totalling about 32K and losing days about 38K. I filed a 1040, noting the 32K in earnings but itemizing 32K (only up to my winnings).
>
>- Well, today I receive a letter saying I owe $1,700! They added up the W2-G's and it comes to 38K, above the 32K I reportedly won. This part is true, HOWEVER, they only see teh w-2G's and not the losses that came immediately after being paid those jackpots. I mean, it's possible to win a 4K royal jackpot and then within hours blow that entire sum back playing $5 VP. So net for that day is zero, not 4K.
>
>I can file a response, they say, with documentation. Should I file my complete journal for that year with an explanation on the cover sheet? Or can I take it to an IRS office?
>
>Or am I screwed?
>
>Help!
>
>Thanks.

I'd just tell them what you did. Tell them that, since you
misunderstood what you were supposed to include as your income, you
didn't include the total of your w-2gs, as you should have. That your
original deduction was limited to what you stated as your income
should give you a credible reason to deduct the higher amount,
although, not being a tax professional, for all I know, you can't. It
sounds like you hit $38,000 in jackpots and lost $44,000 besides them.
Tell them that. I think it's likely that they'll accept that
explanation without you having to show details of your plays. I know
of many people who were originally told they owed far more than you
did because they didn't report all of their w-2gs in their income and
none of them ever ended up owing anything once what they did was made
clear to the IRS. Many people are far more stressed than they should
be by the first amount that the IRS says they owe.

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