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Old 04-15-2008, 08:24 AM   #426
Henry17
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Re: Canadian Online Poker Tax Thread

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Originally Posted by morello View Post
The problem here is that Pro-Line is beatable in the long term despite it being a parlay wager. I have no idea what strategy they were using, but it is entirely possible that they were making +EV wagers. In fact, given that they have won 10M it seems reasonably likely that they were in fact making smart bets. You can't just dismiss the idea of "Reasonable expectation of profit" so easily.
The only reasonable explanation is that they are exploiting the fixed lines. Pro-line use to put out lines for the whole week and then it was possible to win. They stopped that and instead started releasing lines a few days in advance. Not as good but still exploitable. It is the only thing that makes sense because he had access to one of the largest bookies in the area but choose to stay with the lottery.

Also I think the $10M number is BS. He would spend a lot of money but he still drove a s**tbox of a car, lived in a c**Py house, and when he bought a stripper a gift it was a awfully cheap ring that couldn't have cost more than $800. I think the $10M might have been what they won not what they actually profited.

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Now, perhaps they pretended to be fish and convinced a judge that their wagers could never be +EV, but why can't a similar analogy be made with poker? Couldn't a poker play bring forth an expert that claimed they were running hot or whatever and receive the same judgement?
No. In their case you could get experts to say it was impossible to be profitable in the long run because mathematically it is. Pro-line is not even the same as wagering on parleys at a real sportsbook where the payout is considerably higher and the sportsbook does not have a rule that if they lose too much all bet payouts get prorated to a lower amount. Any expert on probability will testify that it is impossible to beat pro-line because it is.

You won't be able to find an expert on poker who will testify that the game is unbeatable or if you do find someone CRA will find ten to say the opposite.
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Old 04-17-2008, 09:47 AM   #427
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Re: Canadian Online Poker Tax Thread

Who are these people that play poker for a living, have it as their sole source of income and are given legal advice by a QUALIFIED TAX attorney, advising them not to pay their taxes on poker winnings because they are not required to.

I have been playing for a living for 4 years now and I have paid taxes on my winnings each and every year. If I could legally get away with not paying taxes I would.

I have contacted over a dozen TAX attorneys in differenct cities, ,and spend about 4k in fees trying to find JUST ONE who would support my claim that I do not have to pay taxes on my poker winnings, as it is my sole source of income. All I need is one so I can stop paying income tax and I can't find one.

They all say the same thing, Since it is my sole source of income, and poker winnings for me are considered a business and they are taxable.

I even tried to argue that My wife works, makes 100K/year and I am a stay at home dad with my 5 year old daughter, so i don't need the income, couldn't my poker winnings be considered a hobby since my wife makes enough money for us to live on and my "main job" is being a stay at home dad.

They all said the same thing, "No"

I would pay dearly to have a notarized letter from a tax attorney giving me their legal advice not to pay taxes on my poker winnings.

I would then stop paying imcome taxes, and if I were ever audited I could bring out that letter and avoid the penalties and fees associated with not paying if I ever did have to file back taxes for some reason.

It's the penalties and fees associtated with getting caught not paying income tax that frighten me, not the income tax owed.

Take a person making anywhere from 70-120K /year in poker over the last 5 years who did not pay income tax during those 5 years. They ould owe somewhere in the neighorhood of 150K in back taxes plus they could owe an additioanal 450K in penalties and interst depending on how bad the CRA went after them.
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Old 04-17-2008, 10:08 AM   #428
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Re: Canadian Online Poker Tax Thread

NL_Fool,

You won't find a single lawyer that will tell you that legally you are not required to pay taxes. There is no doubt about it. Legally you are required to report the income and pay taxes on it.

Being legally required to pay and actually suffering any consequences from not paying though are two different things. Had you never claimed the income and had been smart about it more than likely nothing would have ever happened to you.
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Old 04-17-2008, 11:12 AM   #429
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Re: Canadian Online Poker Tax Thread

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NL_Fool,

You won't find a single lawyer that will tell you that legally you are not required to pay taxes. There is no doubt about it. Legally you are required to report the income and pay taxes on it.

Being legally required to pay and actually suffering any consequences from not paying though are two different things. Had you never claimed the income and had been smart about it more than likely nothing would have ever happened to you.
Wouldn't the CRA wonder why a 35 year old male filed 0 income for the past 5years?
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Old 04-17-2008, 11:28 AM   #430
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Re: Canadian Online Poker Tax Thread

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Wouldn't the CRA wonder why a 35 year old male filed 0 income for the past 5years?
I don't want to say they wouldn't and be responsible should someone get in trouble but I don't think they would notice. CRA is not the IRS. As far as the public service is concerned they might not be as ******ed as the people working for HRDC but they are still part of the public service so lazy and incompetent.

I have not claimed gambling income for 16 years and no one has bothered me. I have no other source of income. For 6 of those years I filed taxes with income under $300 and rent of $32k (you get a tax credit if you rent and you're low income) and CRA didn't say a thing. With gambling becoming more mainstream I decided that the $1200-1300 I'd get back was not worth provoking CRA over so I just stopped filing taxes. There is no requirement to file unless you owe money or CRA specifically requests it.

Now in your case it would be very suspect if you stopped filing but had you never started I estimate the odds of ever having CRA bother you as fairly small. As long as someone does not keep a blog, talk to reporters or piss off someone who will then report them they should be fine.
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Old 04-17-2008, 04:48 PM   #431
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Re: Canadian Online Poker Tax Thread

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Originally Posted by morello View Post
The problem here is that Pro-Line is beatable in the long term despite it being a parlay wager. I have no idea what strategy they were using, but it is entirely possible that they were making +EV wagers. In fact, given that they have won 10M it seems reasonably likely that they were in fact making smart bets. You can't just dismiss the idea of "Reasonable expectation of profit" so easily.

Now, perhaps they pretended to be fish and convinced a judge that their wagers could never be +EV, but why can't a similar analogy be made with poker? Couldn't a poker play bring forth an expert that claimed they were running hot or whatever and receive the same judgement?
In the past my brother beat Proline because of dead lines, wrong lines and a more generous line. Now only true pros can beat the game as OLC has juiced down the payouts and killed off their dead lines by not listing their games on a weekly basis. They still have the wrong lines and the regionally skew their bets.
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Old 04-20-2008, 01:06 PM   #432
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Re: Canadian Online Poker Tax Thread

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I don't want to say they wouldn't and be responsible should someone get in trouble but I don't think they would notice. CRA is not the IRS. As far as the public service is concerned they might not be as ******ed as the people working for HRDC but they are still part of the public service so lazy and incompetent.

I have not claimed gambling income for 16 years and no one has bothered me. I have no other source of income. For 6 of those years I filed taxes with income under $300 and rent of $32k (you get a tax credit if you rent and you're low income) and CRA didn't say a thing. With gambling becoming more mainstream I decided that the $1200-1300 I'd get back was not worth provoking CRA over so I just stopped filing taxes. There is no requirement to file unless you owe money or CRA specifically requests it.

Now in your case it would be very suspect if you stopped filing but had you never started I estimate the odds of ever having CRA bother you as fairly small. As long as someone does not keep a blog, talk to reporters or piss off someone who will then report them they should be fine.
Very interesting... and reassuring.

homeboy was asking above about getting a mortgage. What about spending $200,000 cash on a house, or even just having that amount sitting in a savings account? Are either of these things somehow going to get the CRA's attention, or cause someone to look into the fact that this $200K person claims just $1000 a year from spot jobs?
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Old 04-20-2008, 01:22 PM   #433
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Re: Canadian Online Poker Tax Thread

CRA can look at the income reported and the quality of lifestyle and from that determine what they feel is the amount of unreported income and tax you on that amount. That being said I drive a Porsche and they have never asked me how I could afford it. I'm not sure what would trigger a quality of lifestyle audit. I have a friend who was greatly under-reporting his income from his landscaping company and he spent a lot of money of a luxury SUV and two Sea-Dos and he got nailed that year.
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Old 04-23-2008, 07:05 AM   #434
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Re: Canadian Online Poker Tax Thread

I like Porsches. What model and year?
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Old 04-23-2008, 07:37 AM   #435
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Re: Canadian Online Poker Tax Thread

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I like Porsches. What model and year?
I prefer to keep things as general as possible. After all this is a public thread and on the off chance CRA reads this and takes offence to my constant reference to them as incompetent ******s I don't really want to give out enough information that they could use it screw me.
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Old 04-23-2008, 09:48 AM   #436
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Re: Canadian Online Poker Tax Thread

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CRA can look at the income reported and the quality of lifestyle and from that determine what they feel is the amount of unreported income and tax you on that amount. That being said I drive a Porsche and they have never asked me how I could afford it. I'm not sure what would trigger a quality of lifestyle audit. I have a friend who was greatly under-reporting his income from his landscaping company and he spent a lot of money of a luxury SUV and two Sea-Dos and he got nailed that year.

Tell them I have been doing great at the poker tables which is mnon taxable
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Old 04-23-2008, 09:50 AM   #437
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Re: Canadian Online Poker Tax Thread

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Tell them I have been doing great at the poker tables which is mnon taxable
I assume mnon=non in which case you are wrong. Poker income is taxable for the majority of people reading this topic.
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Old 04-23-2008, 03:38 PM   #438
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Re: Canadian Online Poker Tax Thread

Quality of life refers to things like expensive cars, boats, etc. in the eyes of the CRA? What do you think they would think about a tax return that outlines basically $2,000 earned income, plus $7,000 earned on a simple 4% savings account? Do you think the fact that this person rents an apartment & doesn't own a vehicle, or really anything of significant value, arouse suspicion or affect the CRA's opinion of said person in a negative or positive way?


Quote:
Originally Posted by Henry17 View Post
CRA can look at the income reported and the quality of lifestyle and from that determine what they feel is the amount of unreported income and tax you on that amount. That being said I drive a Porsche and they have never asked me how I could afford it. I'm not sure what would trigger a quality of lifestyle audit. I have a friend who was greatly under-reporting his income from his landscaping company and he spent a lot of money of a luxury SUV and two Sea-Dos and he got nailed that year.

Would you explain what happened to your friend ie. process of correction by CRA or other government agencies, penalties ?

Thanks for your continuing advice btw Henry
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Old 04-23-2008, 03:50 PM   #439
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Re: Canadian Online Poker Tax Thread

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Would you explain what happened to your friend ie. process of correction by CRA or other government agencies, penalties ?
I didn't look at it but he complained that they greatly over estimated the amount. Now I don't know if he was just playing the victim or if they actually did.

With the example you provided I just wouldn't file taxes. You don't have to file unless you owe or are requested to do so. $2000 in income does not owe anything. You lose your rent credits and GST rebate but that is an insignificant amount of money.

For someone who doesn't want to pay taxes the important thing is to be able to explain where stuff came from should you ever get audited.
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Old 04-23-2008, 05:12 PM   #440
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Re: Canadian Online Poker Tax Thread

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I prefer to keep things as general as possible. After all this is a public thread and on the off chance CRA reads this and takes offence to my constant reference to them as incompetent ******s I don't really want to give out enough information that they could use it screw me.
Must be a cheap Porsche
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Old 04-24-2008, 08:29 AM   #441
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Re: Canadian Online Poker Tax Thread

Can anyone tell me what my situation would be if i moved from the UK to live in Canada for a few years? (10/20-25/50 nl player)

Being a UK national would I still pay my taxes to the UK (=£0) or would i be subject to Canadian taxation laws?

Thanks
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Old 04-24-2008, 08:54 AM   #442
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Re: Canadian Online Poker Tax Thread

Vacant how do you plan to work this?

The longest you could stay in Canada without either a student VISA or a work permit is 6 months. So if you plan to just come and then not leave or would you be applying for a VISA?

If you leave Canada and re-enter you get another 6 months so do you plan to just fly home to the UK every so often?
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Old 04-24-2008, 11:20 AM   #443
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Re: Canadian Online Poker Tax Thread

Maybe kind of a silly question, but suppose the following hypothetical...


I'm some dude who won the sunday million or it's equivalent elsewhere.
I decide "screw it, im not working... im enjoying the money".
But because my withdrawl limit is at about 10k a week, I've been withdrawing sporadically throughout the past year to pay bills and support my lifestyle.



This is consistent with just about how any genuine "professional" handles things, so they are interested in investigating. But trying to establish how the money was won is just about impossible. Most of my play was on absolute poker, where the hand histories and tournament files were prematurely purged from the records. So where do they go from there?

If they cannot prove that the poker income is from a lottery-esque tournament score or from a cash game, who is the burden of proof on?


it seems as though it would be extremely difficult in ANY case for them to prove the frequency of the bets, attempts to minimize risk, and degree of professionalism. especially if that person has only been playing for a year or two.

Last edited by Abbaddabba; 04-24-2008 at 11:32 AM.
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Old 04-24-2008, 11:30 AM   #444
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Re: Canadian Online Poker Tax Thread

I don't feel comfortable answering that one. I'd say the onus is on you to prove the source of the funds but I rather TorontoCFE answer it.
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Old 04-24-2008, 03:41 PM   #445
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Re: Canadian Online Poker Tax Thread

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Vacant how do you plan to work this?

The longest you could stay in Canada without either a student VISA or a work permit is 6 months. So if you plan to just come and then not leave or would you be applying for a VISA?

If you leave Canada and re-enter you get another 6 months so do you plan to just fly home to the UK every so often?
Its just hypothetical at the moment so I haven't thought about the finer details too much (although this is a bit larger than a fine detail ).

If im playing poker professionally and not on a student VISA is there really any way i could get full residence?
I guess if its not long term i can fly home every 6 months (do i have to stay in the UK for a decent amount of time?) which i imagine would then keep me under UK tax regulation and not Canadian?

Im just guessing though, as i said its just hypothetical so I don't know anything about this yet really.
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Old 04-24-2008, 03:59 PM   #446
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Re: Canadian Online Poker Tax Thread

If you spend less than 183 days in Canada than it would be no issue. Greater than that and it gets complicated and again I don't feel comfortable commenting on since it has been a long time. The general rules would be that you'd have to pay income tax to Canada unless something in a tax treaty with the UK supersedes that.

With respect to reseting the 6 months I'm not even sure if you need to go all the way back to the UK or if just exiting Canada and going into the United States for a weekend might be sufficient. I'd start by calling Immigration Canada and seeing what they say. They would also be able to tell you what you need for a VISA.
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Old 04-25-2008, 09:33 AM   #447
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Re: Canadian Online Poker Tax Thread

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Originally Posted by Abbaddabba View Post
Maybe kind of a silly question, but suppose the following hypothetical...


I'm some dude who won the sunday million or it's equivalent elsewhere.
I decide "screw it, im not working... im enjoying the money".
But because my withdrawl limit is at about 10k a week, I've been withdrawing sporadically throughout the past year to pay bills and support my lifestyle.



This is consistent with just about how any genuine "professional" handles things, so they are interested in investigating. But trying to establish how the money was won is just about impossible. Most of my play was on absolute poker, where the hand histories and tournament files were prematurely purged from the records. So where do they go from there?

If they cannot prove that the poker income is from a lottery-esque tournament score or from a cash game, who is the burden of proof on?


it seems as though it would be extremely difficult in ANY case for them to prove the frequency of the bets, attempts to minimize risk, and degree of professionalism. especially if that person has only been playing for a year or two.
If you came under review, the question would be where did the money come from...then you tell them and they ask for proof.
If you don't have any and they don't believe you (likely given that you say there are 0 records of any kind) then they would likely reassess your return to include the income because either you can't produce any cheques to show it is poker income and thus looks like dirty money or they may consider you a pro.

Once you have been reassessed, you either live with their ruling and pay tax or you appeal it. Once you get to that stage, the burden is on you to show that their estimate is off (you have a duty to maintain records and if you don't , they are within their rights to guess). They don't have to prove that you are a pro, only that you have undeclared income and then you prove that that undeclared income is not taxable.

I suppose you could ask the site to check who won a major tournament or help you out with account details/ histories.
You could probably even win in that situation so it wouldn't be hopeless..
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Old 04-26-2008, 01:33 AM   #448
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Re: Canadian Online Poker Tax Thread

if you keep detailed records, you're a pro.
if you dont keep the records, then you cant prove you arent.


seems kind of self defeating.
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Old 04-26-2008, 07:13 AM   #449
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Re: Canadian Online Poker Tax Thread

They are different kinds of records. If someone's claim is that they received funds via some windfall they should be able to prove it. In the hypothetical provided I'd suggest getting it documented when it happened and also that it would be fairly easy to get Absolute to document it afterword. Documentation that you won a Sunday Millions though is not in anyway related to the record keeping criteria (which is of low weight anyway) that would include records such as a PT database, a ledger of B&M games, etc.

Also there is no time limit on how far CRA can go back so you need to keep these records forever.
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Old 04-30-2008, 03:56 PM   #450
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Re: Canadian Online Poker Tax Thread

Is it true that those who do claim have until June 15 to file (being self-employed)?
But they still must pay April 30?

My plan is to talk to someone this week or next week to file for <$60k and pay the late fees or whatever it is. Does anyone see any serious problems with this plan?

What kind of accountant should I go to? CA? Can anyone PM suggest someone who handles players in Toronto?

Thanks!
j

Last edited by junkanoo; 04-30-2008 at 04:26 PM.
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