>
> >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.
>
Thanks! I will just attach a letter with the response explaining that. Rightly or wrongly, I always do my accounting on a daily basis -- I don't know how to do it otherwise. So in a single day, it's quite easy to lose more than the single taxable jackpot that gets recorded ...
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