Quote:
Originally Posted by Abbaddabba
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..