Page 22 - March 2007 • Southern California Gaming Guide

Page 22
SOUTHERN CALIFORNIA GAMING GUIDE March 2007
The Frugal GamblerTM: Jean Scott
Tax Record-Keeping for Gamblers
I am just going to jump into this very important subject right away. e IRS doesn’t de ne a gambling session. However, many players, especially those who gamble often, de ne a gambling session as one day. ey note the daily total in either the win or loss column of their
diaries or “gambling logs,” as they often call them. Some people are even more detailed, counting it a new session if they change games during the day—i.e., from video poker to blackjack—or if they move to another casino to play the same game.
Here’s how one astute Internet friend put it when asked how he would justify the “daily- session” method if he were audited:“I would tell them that many of the data elements are simply not appropriate to track on a micro level. Some days are composed of lots of jumping around between machines, tables, etc. It works best to take an accounting at the end of each day as a total of all activities, much like a business does when counting the register and recording total cash activity for the day.”
e IRS demands that you keep a gambling diary or numbers in your diary if you play slots. is is easy
Jean Scott, The Frugal GamblerTM
“similar record,” but does not give any details about what this diary should look like. Should it be a simple little notebook or pocket calendar you carry with you, where you jot down details in real time after every gambling session? Or can you go to a computer after each session and input all the details into an elaborate spreadsheet? I’ve known people who’ve done it both ways and survived an audit.
As an example, they mention putting the machine
enough to do if you play one machine for a long length of time; however, this would be unwork- able for someone who frequently jumps from machine to machine. e record keeping would take more time than the actual gambling activity. (Actually this isn’t a bad idea—the less time your money is at risk in a game where the casino has the edge, the less money you will lose in the long term.)
Actually it’s easier to talk about what kind of a diary the IRS is not likely to accept—one that’s cobbled together at the end of the year, based on“memory.”Ihaveheard
stories of people who have hit a big jackpot at the end of the year and then decided to create a whole-
IRS publications and
regulations do give some
details about what infor-
mation you can put in
your diary, but these sug-
gestions or guidelines just
don’t seem to t certain
types or styles of gambling, especially casino playing.
“The IRS demands that you keep a gambling diary or ‘similar record,’
but does not give any details about what this diary should look like. Should it be a simple little notebook or pocket calendar you carry with you, where you jot down details in real time after every gambling session? Or can you go to a computer after each session and input all the details into an elaborate spreadsheet? I’ve known people who’ve done it both ways
year diary at that time, with enough losing sessions so they could write o the win. is is very di cult to make believable—and some have been stopped in their tracks during an audit, because the early losses they made up were more than their total income during that period!
This official ruling was made out of one tax case: Entries to your diary or log must be made when the gambling activity takes place. Your records may be determined to be inadequate if a handwriting expert testifies many of the entries were made at the same time.
If you want more information on the thorny subject of taxes and gambling, you can go to www.queenofcomps.com and order Tax Help for the Frugal Gambler or call 877-798-7743.
If you want to learn more about taxes and gambling, you can order Jean Scott and Marissa Chien’s book, Tax Help for the Frugal Gambler, at Jean Scott’s web site, www.QueenofComps.com. All Jean’s products are available on her web site, including her new book, Frugal Video Poker by Jean Scott and Viktor Nacht.
and survived an audit.”
Can’t Get Enough of our Casino Experts?
Bill Burton: About Gambling Bob Dancer: Video Poker Jean Scott: The Frugal GamblerTM Jim Mercurio: Poker
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