This is just a friendly warning to all who play here. Lets just say this year, I went on a few crazy heaters playing bj on PP. I had no issues getting paid, I kept proper win/loss logs, I have everything organized and ready for tax filing. That's all good until I checked my mail on Friday.

I received 353 individual envelopes containing w2gs all around $2k - $4k, totaling close to $1 million in gross winnings I'd say with only opening 1/4 of these. Under wager type, they say "7_ONLINE_SLOTS", so I thought possibly this was some kind of computer error and would have to wait until today to talk to someone about this. Nope, It was just confirmed by 3 different people that bj on partypoker is considered a slot and they send you a w2g for each WINNING hand over $1200. So if I win 100 hands and lose 100 hands, they still send a w2g for the winning hands. I was playing 1-2 hands at $500 (max) each, and really it looks like they added my original bets into gross winnings also, at the minimum. Sure doubles and splits add up, but no way these numbers are correct.

I am beyond fuming right now. I just got off the phone with a lady who told me, "all you have to do is file win/loss statement against the w2gs." Yea that's wonderful, I also have to pay someone to open the rest of these and file 353 individual forms. These couldn't be sent all in 1 big envelope? On top of that, these numbers are no way correct, and were sent out to the IRS. I'm not sure on the laws (yet), but I am not happy about this at all. Sorry for the long rant, this is just a heads up for anyone who plays here. Also, I'm not sure about the high stakes poker tables, but if they work they same way, I'm sure I have some of those mixed in here as well.

I have to contact an attorney, but I believe this is going to put me in a crazy tax bracket. I can't even think right now, I am so upset.

Edit - How nice, I just received an email saying, "we will be mailing you 365 w2g forms" - totaling over $600k. I guess a few got lost, or are still on the way.

You can deduct your losses up to total winnings.

Shouldn't be a big deal or am I wrong?

I can itemize and do this, but I am almost 100% positive this will put me in a crazy tax bracket, I need to contact an attorney and find out what my options are.

Imagine playing blackjack in a live casino for $1200 a hand. You do not get a w2g for every winning hand during the session. You don't get w2gs period for that matter, but that doesn't mean you don't owe taxes on wins. This is outright crazy and I guess I should of read the TOS better because I had no idea blackjack online is considered a slot machine. When I play blackjack on here, I don't click on "slots" I click on "table games" assuming all rules and tax laws are the same as live blackjack. Wow did I mess up big time here.

-- Also if there is anyone in the same boat as me, could you please PM me, thanks.

It won't affect your tax bracket if that makes you feel better.

A tad better, thanks for the reply.

Hi

I got some of these too and had the same initial negative reaction. But I believe the process will still be the same. You still report 1 net gambling income figure on your tax form, not each session or day individually. The same goes for losses. 1 net deduction. And These numbers should not change whether or not party poker decides to send W2g's .

Im not mailing in w2g's just like I don't mail in my employer w-2's, the IRS already gets a copy, the numbers just need to tie up to your return and you need to provide proof (win/loss records) if they decide to audit you

I was net down on the year so I owe no taxes.

I also quit gambling in June and havent placed a bet since, have no desire to again, and its been real nice...having to think about betting and this sh*tty stuff again sucks, but this will be the last time I deal with this.

Thanks a lot for your response I appreciate it, and congrats on quitting if it was causing problems in your life. After this I know I will never place another bet online again, unless it's poker, sometimes it's just too slow for me. I feel a little better now though, thanks. As long as the win/loss reports I am waiting on are accurate I should be fine.

Thank you. yeah i absolutely despise these online casinos. they're disgusting. what is odd is the inconsistency to this whole process of tracking and reporting.

1.)reporting by individual win, rather than session, is just idiotic, because players are not supposed to track by hand, so they may very well show a loss for this date with no record anywhere of such a win. you would hope during an audit the IRS would understand this, but you never know (luckily we did it online so these hand records must be kept by the casino if ever asked for them)

2.) they are including bet amount in the winning, for example 600 bet and win (they say 1200), which is just false reporting. I didnt WIN 1200. Such BS and so inconsistent on how W/L is to be documented, but when the IRS spits it through the machines, it will compare YOUR 600 vs THEIR 1200 and increase audit chances.

3.) reporting claiming it is slots, when its blackjack, is also false.

Exactly and that is why I made this thread, to warn people about their wild reporting. I received 350+ W2G forms for probably less than 15 sessions if that and the original bet is factored into the wins. I'm not sure if that is standard protocol or what because I am not usually one to play slots, keno, bingo, or any kind of virtual bj or roulette.

If I get audited so be it, I am not trying to evade any money I owe, but I am also not trying to get screwed any harder then I already am. I love how the IRS gets to freeroll like that. Again thanks for the response.

Before you do anything, contact Dan Pilla.

www.taxhelponline.com

He does over the phone consults and saved me a ton of money in taxes (all legit). I heard about him on a radio advertisement. He told me exactly what IRS tax forms to fill out and walked me through how to fill them out. It was $150 for a 90 minute block of his time but well worth it because he save me thousands.

AC

Glad he helped you but $150 for 90 minutes on the phone seems like a rip off.

Contact an accountant that specializes in gambling taxes

I had a Blackjack hand on TropicanaCasino where I bet $400 - split AA - got two 10's - and won both against a dealer 18. So, I won $800... right?

At that point, the action stopped, and there was a popup to confirm some info, and then I got nabbed with a W2G for $1600. I reached out to their customer service and they explained that even though it looks like a "table" game, the reality is they play out randomly like slots, and the rule on slot winnings is that the total payback is considered, not just the net win.

I was sure I'd done something similar on other sites... sure enough I got three W2G's from Borgata at the end of January. At least Trop was kind enough to warn me. Even still I quit playing online casinos after this happened.

As far as taxes, yeah, you can deduct losses against winnings so it nets to zero, but the problem is that it skyrockets your AGI. So if you ordinarily take certain credits like student loan interest or child care that are capped at a certain AGI, you're SOL now.

You know this thread is about blackjack, not poker, right?

Yea, a warning would of been nice. This is my first time dealing with so many w2gs so I was kind of in a panic. I'm just glad I'm not in a state where you can not deduct losses for state taxes. Thanks for the replies everyone.

I had the same issue in a different nj online casino, back in December 2013. I suspect I was the first to encounter this. After doing extensive research, I decided to only file my net win for the gambling session (based on a legal precedent). I just received my CP2000 and I plan on taking this case through tax court.

There are some major drawbacks to being forced to itemize this:

1) AGI is much higher which means no child tax credits, no deducting student loan interest, among other issues

2) Many states don't allow itemized deductions, or they get phased out after a certain number. This can mean a massive state tax liability on phantom income

3) Loss of standard deduction if would not have otherwise itemized

As these W2Gs are all generated in a single gambling session (in my case, in a space of 1.4 hours), it makes no sense that they should each be considered accessions to wealth. There is legal precedent to support this as well.

This is where the BS is beyond stupid. You basically get screwed because you cannot claim a bunch of tax credits that you should be able to. I mean if you bet 1000 and win 5000 times and lose 5001 times you are a net -1000 player. Not a winner of 5,000,000 and then you lost 5,001,000. In some states you would owe tax on 5,000,000 and not get to claim 5,001,000 as a loss. If the tax rate was 3% you would owe 150,000 in tax liabilities. With the taxes you now lost 151,000 + what ever tax credits you are entitled to. The tax laws need to be changed before regulation of online gambling in this country. This rule will turn players away from online gambling and result in a player decline.

Yup, I'm over it and will not play online again until things get worked out. It was a major shady move bombarding me with all of the w2gs out of the blue. Why weren't they sent through out the year? I think I know why.

So what was the outcome? Where did you claim the money on the 1040?

I just received a cool 500+ w2G's for a similar reason (was hot in roulette and received a w2G for every bet I won above $1,200) This was on Betfair. Apparently I won a million dollars this year which is weird because I sure don't feel like a millionaire.

My win/loss is a negative. If I report $1M on the w2G form and itemize the losses I end up owing thousands instead of getting thousands back. I'm sure the IRS' system will pickup on me not claiming the figure on the w2G form?

I could show $1,200 on a w2G form and the remaining winnings and losses on a schedule C do 0 out but I do not know how that would fare with the IRS during an audit, fraud? Has anyone ever claimed a lesser amount on the w2g form than the form actually states, and did does that guarantee an audit?