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IRS Audit or prosecution from Online Gambling?
I live in NY. The stupid laws on online gambling are nebulous and confusing. Why is our government so backwards with regards to this issue? From reading several different sources, my current understanding is that individuals are not being sought out for this activity in the US, but that the US govt is trying to go after the companies that allow US citizens to gamble online, or banks etc. Kind of like going after the drug dealer and ignoring the end user.
I am trying to find out whether or not there is truly no penalty for a US citizen to do this. Obviously the govt is not aggressively monitoring gambling website visits to prosecute citizens or else this would end up being like a child porn issue and there wouldn't be millions upon millions of Americans openly doing this and discussing this. Has anyone run into any other problems? The IRS crying foul after you declare gamling winnings? Bank asking you where those monthly checks are coming from? Any bad experiences at all?
Thanks
Thanks sdtech. However, I assume that the rules for online gambling are not the same as for casino gambling. If I make a $1000 a day per online visit for an entire year from online gambling, technically I will have fit into the rule you are talking about. But I don't think there is any way the govt. is going to let me not pay taxes on over $300,000 that they can see. The casino rule works because you get paid in cash at the end of each trip there and no bank or govt. organization sees your winnings or your personal information unless you go over a certain limit ($1200 or whatever).
2 Answers
- Anonymous1 decade agoFavorite Answer
. I imagine the 'casino' has to report its winnings and loses. That means they report YOU if you win.
- 1 decade ago
To my knowledge, income from gaming is only taxable (at least from the Feds) if the amount won is $1200 or greater. I do not think you would be in violation of any tax laws if you only withdrew $1199 at a time. It would be no different than if I went to Vegas and hit an $1199 slot Jackpot at 8 different casinos on the same night. I would have netted a nice piece of change, but never once winning over $1200 and it would all have been tax-free.
