rev you should probably post a source if you're going to make claims of that nature, i can't imagine any move to tax gambling winnings being retrospective because quite simply that money is not taxable under the current tax code for people who are not conducting gambling in a businesslike manner which basically is interpreted as 'as long as you don't hire people to gamble for you you're fine'

you're using a lot of weasel words in your post, you need to either be specific and post sources or retract your claim

https://www.ato.gov.au/rba/content/?...tent/91541.htm here's a relevant ruling from the ATO from a while back on whether an otherwise unemployed poker player's income is taxable.

Yep the ato are currently building a task force on poker players profits
This special unit currently has 600ppl tracing all three australians that are
profitable, my info suggests that any player not declaring poker income
will be subject to fines, interest, jail and possibly public execution.

Ok those last few posts are very confusing, that link is really interesting swoop not that I fully understand it. My results are fairly easily accessible on the internet/blog should I be concerned ? / stop doing this? :/


hmm not sure how you can know this and what you mean by 3 players lol

haha ah ok u were jks

The link is basically to the private ruling the ATO made assessing an Australian who played poker as their main source of income. It was ruled as not taxable income under current law.

Backtaxes for income currently legally defined as not taxable is a lol claim without providing sources and the poster should be forced to post their source or get an infraction for scaremongering. Yes, winnings may be taxed in the future but not unless ATO changes their ruling on whether gambling winnings are taxable and if they ever do i'd imagine it would be from that tax year forward. Remember, there are probably only 100-ish people in Australia who play poker full time from playing poker and of those significantly less than 100 are making 50k+ it just isn't worth the ATO's time to go after that revenue as it will cost them more in labour for auditing etc to collect that revenue than the revenue itself is actually worth.

I wouldn't have bumped the thread in the first place if I didn't have new firsthand information from a reliable source and mods should not allow people to post information as 'fact' as opposed to as speculation unless it comes with a source.

The other significant problem with the ATO starting to tax winnings is the flip-side to the equation which is that losses will become tax deductibles and because of that primarily I can't see poker winnings ever being taxed. And the other point is that on mass it isn't like the country is up

Pretty irresponsible post on your part revolio, not to include any sources or even mention whether this is just hear say on your part.

Swoop is correct about the current ATO guidelines and the previous private ruling. May be time for BruceN to dust off his 2+2 account and reappear to assure everyone!

I don't think talking to someone that works for stars counts as first-hand, but obviously sufficient.

I'm not sure how accurate this statement is currently (although I've heard the argument used several times before) but it should be obvious that if they were to change the legislation they would be able to make this not the case.

Hi all, sorry I have been a bit quiet on the account lately.

There has been no change in the legal position since any of the tax threads were posted.

That doesn't mean however that one element of the ATO wont want to go after a player. I have had private rulings rejected by one area of the tax office and upheld in another. There is not necessarily uniformity in that area.

Your first reliance is always the general public ruling on gambling winnings and I cannot see a situation where this is not a decent first defence for any player.

That said, any player with a decent amount at stake should seriously consider taking the issue through to the courts where I believe the case law will be strongly in their favour.

Nothing has changed since the days of the three 1989 cases (Evans , Brajkovich and Babka.) , and nothing will change until there is a court case concerning poker specifically.

cheers

Bruce

Hey Bruce,

Nice to see you back, Just wondered whether you could expand on what you mean by taking it through to the courts? as in to try and get a private ruling?

Do you have any guesstimates of the likely fees required to get a private ruling made? since I have no idea of the process at all and how much/any legal representation would be needed etc.

glad to see you're still well.

Hi Pontylad,

No you would only take it through the courts as a last resort. There are numbers of steps you would go through if audited by the ATO prior to this, including appeals, AAT Tribunals , mediation etc.

I would make the very strong point that the ATO would have a large amount if hurdles to overcome if they are ever to prove that poker derived income is a business. (this is a minimum test.)

What they are relying on is people to settle before it gets to this stage.

I will now be regularly logging in, if anyone has any concerns please PM me and I will provide you with my business email address.

Cheers
Bruce

And destroy the fabric of society while at it.

What?

Sorry to ask another question Bruce but just to clarify, you don't think we need worry about filing for a private ruling as a pre-emptive measure?

Pontylad,

I don’t recommend the private ruling path because if you get an adverse ruling you are obliged to follow it. Why would you do that if the case law is at worst very grey and the ATO advice is inconsistent, especially if the bias is towards the revenue.
I had a private ruling request rejected at the first instance which we later won on objection.
What bothers me is that I have seen evidence the tax office using the same hackneyed arguments they used in their original rejection to us in other player private rulings. The adverse ruling which was overturned should have been withdrawn but I have recently seen others on different forums quote this as evidence of an ATO crackdown. The original ruling (quoted in a previous post) which I facilitated is still the most relevant.
The context of the comments in the previous paragraph is that I am aware of a player, (not a client of mine) who had a ruling request rejected using the same arguments they tried to put over us. I am not confident that the accountant representing the player had the same determination to appeal this as we did.
The conspiracy theorist in me wonders why our particular original overturned ruling exists in the ATO legal database despite it not being applicable?
All that said, private rulings only apply to a particular players circumstances but they are a handy indication of where the ATO thinking may be.
It is somewhat inevitable that some of us will be pursued. If so, be well prepared, don’t give ground to the argument. The ATO is not the arbiters of the law, the courts are. Always keep a significant proportion of your bankroll in savings as the ATO may seek an escrow of an amount of the appealed tax in dispute.
I have many other thoughts of course and will post those as time permits.

Cheers

Bruce

I hope you are right, but my bet is based on UK legislation that has now received Royal Assent and takes effect on the 1st December this year at the latest. It has nothing to do with the political situation in Aus but rather the current illegality under the IGA and the UK Licence requirements.

This link is to the PDF of the FAQ for licensees under the new act. I have quoted the relevant bit

http://www.gamblingcommission.gov.uk...May%202014.pdf

Have a think about it?

If the majority of gamblers lose and given that problem gamblers mostly come from a lower socio economic background, how can it make financial sense for them to pay tax on their winnings and not be able to deduct from their taxable income any losses when they are so close to the breadline week to week?

And there can be no doubt that if the government did pass laws to tax winnings it would not simply just relate to poker but all gambling and chance winnings.

Why do losses 'have' to be deductible?

What if the legislation is "if you've profited for the financial year on poker, then you're required to pay tax for the amount you've profited based on the tax bracket your profit puts you in"

If you're a losing payer for the year, you dont pay any taxes

And if they were to rule poker as a game of skill, that would be the definition they need to separate it from backjack and pokie winnings

For the reasons I have stated above

It will never explicitly mention poker as the game you are required to pay tax on

So if you are a winning player the next year, you should pay taxes on that money and have that losing year have absolutely no impact at all?

There is no way that lawmakers will deem poker as a game of skill more than what it is a game of chance so as to exclude from any such law impacting upon gambling winnings.

Id like to know how you're so sure on all these things. Is it your opinion, or have you been following tax legislation for foreign countries closely and specifically what our country has been saying re tax on gambling/poker?

You say "it will never mention poker as a game you pay tax on." How are you saying this, what do you know that makes this a true statement?

You also say "There is no way that lawmakers will deem poker as a game of skill more than what it is a game of chance so as to exclude from any such law impacting upon gambling winnings". How do you know that?

All of your reasons are just "because I think so", you havent provided any fact or context, it just sounds like your own opinion that you're presenting as the final say on the matter

+1 enacting retrospective legislation to tax people would cause a public outcry and not something the government will risk over a few hundred gamblers.

Off the top of my head I can't think of any federal tax that has been introduced recently in the last 10 years or so that has been retrospectively applied.

Detonator has mostly covered it already, but are you aware of how the US tax system works? (I'm not an expert but I think I get the basics) There's no reason that we couldn't change to being in the same or similar situation.

Maybe not an entirely new tax, but there are often retrospective tax laws that increase liability, or impose new liabilities, etc within the framework of existing taxes (which is what we would be talking about here with income tax). The petroleum resource rent tax was back-dated to 1990, and I think there were amendments to the transfer pricing regime that were to give it a seven year retrospective effect (they were certainly proposed - can't recall if they were enacted). Anyway, the point is that retrospective tax laws are actually pretty common - they are a recognised exception to the general notion that Parliament ought not to legislate retrospectively. The tax office even deals with the question up front on its website:

https://www.ato.gov.au/General/Tax-a...e-legislation/

But to focus on the issue - I agree that the prospect of a legislative response to this issue (prospective or retrospective) is 0%.

It is simply not a question of a blanket rule. Some people's gambling winnings will be classed as income, most people's won't. It depends if your gambling can, in accordance with existing case law and general principles, be classified as a "business". I can see no reason why some poker players would not be classified as a business. Equally, the vast majority will not be.

It is not a question susceptible of a universal answer. It will always depend on the facts.

Hi Scipio,

I don’t think you could that confidently assert that some poker players would necessarily be caught in the tax net.
If you read the case law there are only 2 instances where gamblers were taxed on their winnings in Australia, and both involved associated businesses. In my view, this is one of the tests in Brajkovich which the courts would consider to be essential to any ATO argument. (if they follow precedent.)

I was privy to a case against a player where the ATO tried to draw this bow in their initial tax assessment but even then, it failed miserably. What I found interesting is that they were aware for their position to be robust they needed to draw that bow.
That said, we will all have different opinions and I would suggest that any players getting advice from accountants and tax lawyers make sure they use people that have direct expertise in this area.

Cheers

Bruce