Hello all, I have a few questions involving my general poker life and am hoping some experienced people on here can shed some light with a few answers. First off a bit about me. I am 27 years old and have been playing low limit poker as my only income for 5 years since i left my job at a high end restaurant, living that form of a stressful life. I quit my job with a 15K bankroll and decided I was going to travel and play poker live for awhile. I played primarily cash games with good results off and on all over the US. I have spent time living and vegas, traveling central america and often coming back home to my great state of Oregon to get grounded and enjoy the organic lifestyle that playing poker most places does not provide. The past couple years I have transitioned to online (bovada/ignition/wsop.com) as well as some live MTTs in vegas as well as my usual cash game grind at 1-2/1-3 and occasional 2-5 shots. I have the ability to live very frugal and stay in my means (Carlos Welch) style. I have been doing this all off the government radar (I think) and not paying taxes on cash winnings or claiming anything. Last year during the series I chopped a planet hollywood tournament for 13K which brings me to my delimma I am facing now.
I am wondering what are the possible senerios for filing and not filing taxes for this score? I have read a bit on filing as a Rec or Pro gambler and it is all a bit confusing especially being out of the system for most my adult life. If i file my taxes this year and report only the poker score is that going to raise eyebrows from the IRS? will they be looking into my past and cause me some real trouble in the form of an audit ?I have been pretty smart about only using cash for most things to cover up paper trail but over 5 years there are obviously a lot of plane tickets and hotel rooms and deposits from online sites that are documented. So if i could get some information regarding your thoughts and opinons on the matter that would be much appreciated. If you need anymore details about my situation to answer correctly please dont hesitate to ask. I will also add that my time as a "full time" pro is coming to end in all likely hood after this year at the world series and will pursue my career in food wether it be in the garden/kitchen or possibly with this post someones personal chef. Thanks for your time and best of rungood to all.

I would email Russ Fox, he handles a lot of poker professional and recreational players' taxes. He's very reasonable and provides solid advice.

He's not going to be able to give you any advice that has to do with how to evade taxes though, no honest professional will, but he'll let you know your filing options, potential deductions, potential penalties and how to handle that 13k. I believe there's really no choice but to handle that 13k, I'm pretty sure it's directly reported to the IRS, but people in the live MTT forum or Las Vegas Lifestyle forum would know for sure.

Good luck with everything.

take this with a grain of salt

I have not paid income taxes for most of my adult life, and for about 1/2 of that time, I have made a high 5 to low 6 figure income (mostly not from gambling). If you received a tax form when you cashed in that tournament, then the government has a record of that win. If you received no tax form (like every small-ish tournament I have cashed in live and been paid in casino chips), then the government has no record of your win.

After my business tanked about 10 years ago and I had a lot of personal issues pop up, I took a job for the Illinois Department of Revenue, and part of the hiring process was looking at my taxes for the past 3 years. Since I had not filed for the past 3 years, I had to go to the IRS and ask them for all of the tax records they had for me during that time so that I could file back taxes. They had nothing to give me and told me that it was my responsibility to keep all of my tax records for 7 years. During that 7 year period, I had multiple 1099 agreements with companies that were paying me for my work. I figured that is what I would have to pay taxes on in order to get this job and move forward. The IRS agent, at one point during a 45 minute long conversation, told me that I could either a) file all annual tax forms for the last 7 years with zero documentation and risk getting audited and having to figure out what to do after that or b) continue to not file.

I elected to file with zero documentation and zero income for 4 of the 7 years because I didn't have any information to complete the forms with. Nothing happened. I paid some tax on the info I did have so I could get that job, but no one batted an eye afterward.

I guess that my point is, even though there is a paper trail of your income (bank accounts, 1099 forms, etc), in order for the IRS to look at your income, there has to be something to trigger them to do so. The IRS can't audit someone that hasn't filed their income tax, it is almost like you don't exist to them. Sure, the government could find you pretty easily, but they aren't looking for you over one $13k payout. In the past 10 years, I have had 1099 forms issued to me over $150k and that didn't trigger anything either. $13k is an incredibly small transaction in the big scheme of things (but a great score for you!).

Now, keep in mind that I am a frigging loser and can't develop any credit and have to pay cash for everything and at any point it can all come tumbling down and I can get banged by the IRS on late penalties, interest on non-paid tax, etc. But, not paying my taxes has not led to anything catastrophic for about 20 years, so maybe you'll be fine?