danepeterson
danepeterson
Joined: Apr 23, 2012
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March 26th, 2021 at 3:43:13 PM permalink
Hi everyone,

I am looking for some advice on what steps I should take to solve a gambling tax issue. I just got an IRS bill in the mail saying that I owe $27,000 in taxes for multiple jackpots I won back in 2019. I know for a fact I lost way more than I won for the year, but I do not have any official records of the losses. Is that something I can obtain from my local casino? I filed my 2019 taxes myself on TurboTax and never reported any gambling wins or losses. I assume the casino sent them a record of my jackpot wins. I know I will probably need to hire an accountant to figure it out, but I was hoping someone might have already gone through this same sort of situation and could explain the process to me. Any advice would be much appreciated.

Thank you!
Dane Peterson
DRich
DRich
Joined: Jul 6, 2012
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danepeterson
March 26th, 2021 at 3:47:59 PM permalink
The IRS doesn't accept casino win/loss statements.

The IRS will put you on a monthly payment plan if you ask. I once did one for $500 a month for six years.
Order from chaos
ChumpChange
ChumpChange
Joined: Jun 15, 2018
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danepeterson
March 26th, 2021 at 3:51:18 PM permalink
I don't really want to be or should be the first to respond to this question. OMG! Your local casino may have available a Win-Loss Statement for the previous year, but I don't know about the year before that. You win a few handpays and blam, the IRS thinks you won! Those in the know keep a gambling diary to controvert the IRS's claims. If you didn't keep one, you can't document your losses. Casino Win-Loss statements may help you out, but they are flimsy evidence at best unless you are strictly a slot player.
rdw4potus
rdw4potus
Joined: Mar 11, 2010
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danepeterson
March 26th, 2021 at 3:58:45 PM permalink
ALWAYS include every w2g on your taxes. The IRS will catch the missing form(s) every time if you don't. And, it's easy in turbo tax to list a loss amount that matches the w2g total. The IRS is unlikely to audit your return if the wins and losses are both there. It'll be much harder to get credit for the losses now that the IRS had to perform a correspondence audit to include the wins.

Did you happen to do the taxaudit.com membership with your TurboTax filing? They're great at navigating things like this.
"So as the clock ticked and the day passed, opportunity met preparation, and luck happened." - Maurice Clarett
danepeterson
danepeterson
Joined: Apr 23, 2012
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March 29th, 2021 at 11:44:32 AM permalink
Hey ChumpChange,

Thanks for your reply. I have quick question for future reference. Besides calendar dates, amounts won/lost, and casino location, what other things should I include in a gambling diary to meet the IRSís expectations.

Thank you.
Dane Peterson
danepeterson
danepeterson
Joined: Apr 23, 2012
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March 29th, 2021 at 11:51:22 AM permalink
Hey rdw4potus,

Thanks for your reply. Unfortunately, I did not do the taxaudit membership. I realized that this is not an actual IRS bill, rather it is a CP2000. So Iím going to send in the disagreement by the due date and proceed from there. Hopefully I can scrounge up enough evidence of losses to match the w2g wins.
Dane Peterson
ChumpChange
ChumpChange
Joined: Jun 15, 2018
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danepeterson
March 29th, 2021 at 1:39:10 PM permalink
I'd defer to people who actually keep gambling diaries. Table number, slot machine number, time beginning, time ended (but I can't keep track of time in a casino with no clocks, I estimate how many hours I played a particular game and make a session out of that).
heatmap
heatmap
Joined: Feb 12, 2018
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March 29th, 2021 at 2:47:15 PM permalink
Iím having deja vu anyone else?
ChumpChange
ChumpChange
Joined: Jun 15, 2018
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March 29th, 2021 at 2:57:51 PM permalink
Keep playing until you can quit ahead.
Commish
Commish
Joined: Jan 5, 2013
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danepeterson
March 29th, 2021 at 6:40:34 PM permalink
This is a simple fix. Send in an amended return on a 1040X showing the W-2G income and listing the losses on Schedule A. The casino will be able to give you loss statement for several years so they are available. If you had previously itemized deductions on Schedule A you are done and will not owe anything. If you did not itemize on the original return you will have to add other deductions that you may have and may end up owing some taxes.

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