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

You should be aware of a new memorandum from IRS Chief Counsel. It says in part:

"....The better view is that a casual gambler, such as the taxpayer who plays the slot machines, recognizes a wagering gain or loss at the time she redeems her tokens. We think that the fluctuating wins and losses left in play are not accessions to wealth until the taxpayer redeems her tokens and can definitively calculate the amount
above or below basis (the wager) realized. See Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955). For example, a casual gambler who enters a casino with $100 and redeems his or her tokens for $300 after playing the slot machines has a wagering gain of $200 ($300 - $100). This is true even though the taxpayer may have had $1,000 in winning spins and $700 in losing spins during the course of play.

Likewise, a casual gambler who enters a casino with $100 and loses the entire amount after playing the slot machines has a wagering loss of $100, even though the casual gambler may have had winning spins of $1,000 and losing spins of $1,100 during the course of play...

http://www.irs.ustreas.gov/pub/irs-utl/am2008011.pdf

Hope this helps.

mrick

--- In vpFREE@yahoogroups.com, "caseydog73" <caseydog73@...> wrote:
>
> 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.
>

------------------------------------

vpFREE Links: http://members.cox.net/vpfree/Links.htm

Yahoo! Groups Links

<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/vpFREE/

<*> Your email settings:
Individual Email | Traditional

<*> To change settings online go to:
http://groups.yahoo.com/group/vpFREE/join
(Yahoo! ID required)

<*> To change settings via email:
mailto:vpFREE-digest@yahoogroups.com
mailto:vpFREE-fullfeatured@yahoogroups.com

<*> To unsubscribe from this group, send an email to:
vpFREE-unsubscribe@yahoogroups.com

<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/