NJ Online Casino Tax Disaster

Hi all: Thanks for all the great info. Here's my situation. I gambled a lot using several of the New Jersey Online Casinos in 2014. One of them sent me a W-2G for EACH HAND of blackjack I won over $1200. All totaled, about $1.1 million dollars of W-2Gs, just for that casino. Of course I lost way more than I put in. Every casino keep terrific records of play for online except for one (Borgata). I've asked for a win loss statement from 2014 but have yet to hear back from them.

This threw my AGI into the stratosphere and I lost all my deductions for the year, about a $10,000 hit that wasn't there before (even deducting my losses). I'm also scared about my loss diary-record for the casino that doesn't keep the records (or at least won't give them to me yet)

Do you think I can visit my local IRS office and plead my case? Its such a new thing (started in 2013 in New Jersey). I'm sure there are others in this same situation.

Thanks for your help and advice. Momo

I would think you are going to have to fork out thousands to a tax attorney that specializes in such matters. It could be quite risky to represent yourself when you are relying on advice from anonymous on line forum friends..... I'll add your tale of woe to my reasons for never gambling online... Keep us updated, and welcome to the forum...

You can get win / loss statements from B&M casinos, although the can't be used for tax purposes because they are estimated at best.

Surely you should be able to get a w/l from online, and it should be accurate! But the IRS may still not allow it, even if you get one.

Sigh, you're in for a heck of a fight...

You have no chance in a fight arguing about the W2G's and the adjusted AGI. Sadly, that is just a fact of electronic gambling law. You could explore the option of filing as a professional gambler, but very few people qualify for that.

Continue to press the Borgota for your win/loss statement. Legally they do not have to provide it but they probably will if you are persistent.

The IRS expects you to keep your own daily records and will not accept records from another source.

Welcome to the world of unfair gambling tax laws. Just file properly and pay what you owe. Sucks that your AGI got blown up, but the laws aren't new. Your casino won loss records are mostly irrelevant if you get audited. If you claim offsetting losses for 100% of your W2Gs, then I have no idea what your chances of being audited are. Bank records showing shittons of casino marker withdrawals should protect you if you're audited and telling the truth about your losses.

Be thankful New Jersey allows you to deduct gambling losses for state taxes. Some states don't. FU Indiana.

Quote: DJTeddyBear

You can get win / loss statements from B&M casinos, although the can't be used for tax purposes because they are estimated at best.

Surely you should be able to get a w/l from online, and it should be accurate! But the IRS may still not allow it, even if you get one.

Sigh, you're in for a heck of a fight...

He's not in for a fight. There's no fight to be had. He just needs to file correctly and accept the huge tax hit due to his inflated AGI. Ignorance of the law isn't an excuse, even if the law is terrible.

Quote: DJTeddyBear

You can get win / loss statements from B&M casinos, although the can't be used for tax purposes because they are estimated at best.

Surely you should be able to get a w/l from online, and it should be accurate! But the IRS may still not allow it, even if you get one.

Sigh, you're in for a heck of a fight...

The OP is in a tough spot admittedly. But seems to know the 'whole story', should write it down if not already done. Long, complicated, detailed with every bit of info from every source possible. Back up with every printed record from every source possible, including the 'estimated win/loss statements'. Put together a simple summation of all the data that can then be presented as a summation. And carry along all the notes, receipts, statements, everything that can be obtained including evidence of persistant attempts to obtain that which so far has been unobtainable. Have it all organized, be able to explain the organization of the piles of records that have been summarized and how that was done.

I'm sure there are exceptions, particularly if you happen to be a political 'target', but generally speaking the taxman just wants you to pay your 'share' as the rules are written. Imaculate records, yes even if not composed contemporaneously, will go a long way. Showing up and claiming that you are pretty sure you lost more than you won without a significant and organized body of evidence to support that statement, well that will probably not be rec'd well... You really need to appear to be one of 'the good guys'. Tell em you just want to make sure you are paying enough ( cough, gag ).

All just my non-professional opinion, of course ;-)

Are you married? If so, this would be a dream scenario for the option to file separately. Put all of the deductible items under your spouse for this one year.

Wait...question...it's October 16th. April 15th was 6 months ago. You're working on 2014 taxes? Do they want you to pay interest on the taxes that they think you owe?

Quote: rdw4potus

Are you married? If so, this would be a dream scenario for the option to file separately. Put all of the deductible items under your spouse for this one year.

Wait...question...it's October 16th. April 15th was 6 months ago. You're working on 2014 taxes? Do they want you to pay interest on the taxes that they think you owe?

Thank you all. Wow, super helpful. I just filed the extension yesterday, October 15. I had already paid most of the tax due in April but when I really did the return, the AGi flew off the charts adding the extra $10k. I applied and received a payment plan so I have 120 days to pay it off. Won't be a problem.

And YES, I am married! I think I will end up doing an amended return. And will redo the whole thing to file separately.

Thanks so much!

Quote: sabre

He's not in for a fight. There's no fight to be had. He just needs to file correctly and accept the huge tax hit due to his inflated AGI. Ignorance of the law isn't an excuse, even if the law is terrible.

I do believe I've done it all as correctly as possible. I'm just thinking I should amend my return. I have read some research about this very issue and it appears I need to show ALL of my wins (for every hand of play).....this would be many millions of dollars, but for this year year it doesn't make a difference at this point. I just change my losses to reflect the same.