MAYDAY!! MAYDAY!! Tax trouble!

[tech58]

Finally got nailed by the IRS. Disallowing my deduct for gambling losses.
For my 15-16 years of VP I have used only the Win-Loss statement as support.

I KNOW, I KNOW, dumbass move. I have read many places that this was not acceptable by the Feds. and I am now "hoist on my own petard".
But it worked when it worked, probably due to luckily skating thru on thin ice avoiding an audit.

My only reason for itemizing was because of the W2G's ($16,250) so if I file amended and take the standard deduction 90% of my 2023 problem goes away so I plan to bite the bullet and pay the minimal tax due ($3-400) and not fight it.

More problems ahead. 2024 has been unusually lucky so far largely due to a $20K and two $8K Royals.
BTW, I don't send pic.s because I don't know how, but Wildman is my witness.
Not meaning that the wins are a problem, but my record keeping to date is. I record only a simple win or loss # at the end of each trip which is usually two day's and only started that a year ago this month.

Now comes my appeal to the "Peanut Gallery" (olds is probably the only one seasoned enough to recognize that one).
Any input on record keeping that may have survived an audit, and how to pencil-whip the first half of 2024 or other insights on this subject would be appreciated.

[olds442jetaway]

Bummer. I can’t really give much advice other than stuff the Reg’s say. All gross gambling winnings are taxable. We are supposed to keep detailed records in a diary like machine numbers who you were with and all kinds of stuff. Then there is the problem of what is a session? Usually they count a session as when you leave a casino or change your type of betting to say craps. There is volumes of all this stuff on the internet. Best of luck tech.

[dinghy]

My only reason for itemizing was because of the W2G's ($16,250) so if I file amended and take the standard deduction 90% of my 2023 problem goes away so I plan to bite the bullet and pay the minimal tax due ($3-400) and not fight it.

More problems ahead. 2024 has been unusually lucky so far largely due to a $20K and two $8K Royals.

If I'm understanding correctly, your only documentation for 2023 is the win/loss statement, which they're signaling they won't accept. So yes, I think you need to amend to the standard deduction unless you're willing to appeal their ruling.

I get the impression they have an unfounded prejudice against win/loss statements, but I suspect they're less nitpicky about personal logs. So you could possibly tidy up your 2024 notes to be acceptable. I worry though that they may continue scrutinizing you now that they smell blood in the water.

For my own taxes, if it's anywhere near a close decision, I always take the standard rather than itemizing. I've never had the misfortune of being audited, and I hope it never happens to you again.

[tech58]

Thanks for input.
The record keeping requirements in the tax code are very detailed.
Not sure what a minimum to pass would be.
I have a record spreadsheet from a tax advisor that is also complicated.

Olds I am not very internet savvy any clues on where to look?

[applepear86]

Do they accept casino-ATM receipts and scratchoffs? Win-loss statement would seem to be pretty solid so that has me paranoid now for mine.

[dinghy]

The record keeping requirements in the tax code are very detailed.
Not sure what a minimum to pass would be.

There's no way to be sure, unfortunately.

You've probably seen the official guidance in publication 529 (pages 10-11):

https://www.irs.gov/pub/irs-pdf/p529.pdf

They lay out the basics of a diary, but then add supplementary documentation requirements to establish proof, and then a bunch of game-specific "suggestions" with the caveat that "they aren't all-inclusive. Your tax liability depends on your particular facts and circumstances."

In other words, at the whim of the auditor.

I try to be somewhere in the middle because I want to satisfy the requirements without volunteering unnecessary information.

[olds442jetaway]

Tech, I took this screenshot from the IRS website. The two publications mentioned can be ordered by mail or you can read them on line. Again best of luck to you. Hope this helps a bit. Last I knew the phone number to order forms and publications is 800-829-3676

[olds442jetaway]

[Hiker1]

Sorry for your pain tech58, and I’m just the “peanut gallery”, not an expert, but my understanding has always been that the IRS does not accept the win/loss statements for several reasons, primarily that they don’t capture win/loss by a gambling session, i.e., a continuous gaming session by date, place, and type, but rather for an aggregate period of a month or a year. Remember to the IRS if you start with $1,000 one evening and walk out with $1005 you have a $5 win to report. The win/loss statements are also deemed to be not necessarily accurate as a player may or may not use their players card for every play, intentionally or inadvertently, etc. I always log the date, location, my starting cash, my ending cash, the type of play, the net win or loss, who I’m with if anyone, etc., for each session and make my notes for my log immediately following the session. All the best to you,

[tech58]

Gaining some good info. thanks to all.
Received a copy of a record/log sheet from a tax preparer firm. Pretty much as outlined by Hiker 1.
Will look at recommended IRS forms.
The complexity, vagueness, and gotchas of IRS instructions does as dinghy points out equate to "whim of the auditor". Typical swamp-creature leverage.
Concerned about possible requirement for machine # for each session . That along with location, date, and time could be used to fly-speck each session. Highly unlikely but possible.

Maybe a prior victim of an audit will pickup this thread and share what worked for records