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Old 09-17-2009, 06:32 PM   #801
wuwut666
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Re: Canadian Online Poker Tax Thread

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I have a question about becoming a resident of another country for tax purposes. What happens if after several years of living abroad I decide to return to Canada. I read this page (http://www.cra-arc.gc.ca/tx/nnrsdnts...nwcmr-eng.html), but I am not clear on everything.

Does this mean that I can bring all my property back to Canada more or less tax free? I am mostly interested in investments and my bankroll, but I might also acquire other property while abroad. Is there anything in particular I should consider in planning for this event?
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Reestablishing residence in Canada is likely to not be a huge event in terms of Canadian tax. In large part the principal consequences depend on the tax law of the other jurisdiction. Some countries will want to claim tax on gains accrued on capital while you were a resident there, for example.
this was also a question I had...

Let's say u decide to cut ties with Canada to lose residency (no more house, bank accounts, cars etc.) and go to england/ireland (tax-free poker winnings) for like 1-2 years and come back with like 1 mill in your pocket. You're telling me it's not gonna be too hard to relocate back to Canada and put the money in different places?
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Old 09-17-2009, 06:43 PM   #802
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Re: Canadian Online Poker Tax Thread

1 other thing to add for those of you that are paying their taxes on poker winnings.
my cousin mentioned a type of insurance that basically gurantees your earnings if your were to get sick/had an accident and couldnt play anymore.

he said the premiums are 8k a year, but after 15 years if you havent used any of it, you get it all back.

pm if you're interested and i can ask him more about it.
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Old 09-17-2009, 06:54 PM   #803
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Re: Canadian Online Poker Tax Thread

So who's acutally paying taxes ? There's gotta be so few. Raise ur hand if u did.

Last edited by LuckyfishZ; 09-17-2009 at 07:01 PM.
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Old 09-17-2009, 07:00 PM   #804
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Re: Canadian Online Poker Tax Thread

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talked to my cousin today who is a financial planner for IGM Fianancial Canada. he consulted with a tax lawyer that works for his company. they said that i absolutely should be paying taxes because im running it like a business.

this is all old news of course, but he was pretty adamant on me paying taxes. he said if they wanted to penalize me it would be: 25k for every year not paid + 1% interest.
obviously this is pretty scary. he also said that i can have a tax lawyer claim "amnesty" for me and i wouldnt have to pay any of these fees (this has been mentioned in this thread before.)

my cousin said that for how much money ive made playing poker (high 6 figures) that it would probably be about a 30k fee to sort out my taxes. also, i would be paying 40% (i live in bc.)

paying all this would basically wipe out all of my savings, and i dont think im going to pay.
just an fyi for you guys. im sure there's a lot of you out there in my position.
Almost the same situation, I think I will go broke after paying taxes.

**** with 40 % taxes, it ain't communists here. CRA guys didn't even have 50 bi downswings !
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Old 09-17-2009, 07:19 PM   #805
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Re: Canadian Online Poker Tax Thread

lets just all come together, pool all are poker moniez and buy and island somewhere, make our own country with no fckn taxes. it'd be like monaco but on an island and no french ppl.
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Old 09-17-2009, 07:24 PM   #806
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Re: Canadian Online Poker Tax Thread

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Originally Posted by wuwut666 View Post
this was also a question I had...

Let's say u decide to cut ties with Canada to lose residency (no more house, bank accounts, cars etc.) and go to england/ireland (tax-free poker winnings) for like 1-2 years and come back with like 1 mill in your pocket. You're telling me it's not gonna be too hard to relocate back to Canada and put the money in different places?
If you legit sever ties to Canada and follow the correct procedures then yes you can come back later and not have to pay taxes on any gains / income you made while away.
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Old 09-17-2009, 07:26 PM   #807
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Re: Canadian Online Poker Tax Thread

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lets just all come together, pool all are poker moniez and buy and island somewhere, make our own country with no fckn taxes. it'd be like monaco but on an island and no french ppl.

Actually that is close to the optimal strategy
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Old 09-17-2009, 07:31 PM   #808
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Re: Canadian Online Poker Tax Thread

I don't know. There would have to be some sort of immigration policy or the island would be population would be pretty sad.
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Old 09-17-2009, 07:33 PM   #809
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Re: Canadian Online Poker Tax Thread

You could always import young, busty, gorgeous females to do all the busywork. Housekeeping for instance. The appeal of living in a tropical climate and making money could possibly outweigh the appeal of working the strip club circuit.
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Old 09-17-2009, 07:33 PM   #810
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Re: Canadian Online Poker Tax Thread

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Originally Posted by 4thstreetpete View Post

Regarding the mastercard debit card, since it's from mastercard does it leave a trail behind when you're accessing it on ATMs? (Noobie question)
Well there would be a trail from both Mastercard and the bank.
If the bank is offshore, you might be safe, but if it has a domestic affliate (most large banks do) then they can be compelled to cooperate.

And of course, it should never matter anyways unless they go after you by some fluke. Though I read about a case where they went after a guy (not for poker) for $350.
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Old 09-17-2009, 07:35 PM   #811
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Re: Canadian Online Poker Tax Thread

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So who's acutally paying taxes ? There's gotta be so few. Raise ur hand if u did.
I know of about 15 people doing so.
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Old 09-17-2009, 07:38 PM   #812
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Re: Canadian Online Poker Tax Thread

I know two. One is no longer playing but she did pay when she was.
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Old 09-17-2009, 08:31 PM   #813
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Re: Canadian Online Poker Tax Thread

I hate to be a shiitdisturber, but I've done a lot of research over the last five years, and I'm leaning towards not paying next year. I think we've all been idiots basically, paying our taxes.

I dont have time to detail everything but basically:

1) never call it income, only call it gambling winnings
2) you "play whenever you feel like and dont play when you dont"
3) CRA has lost every time its tried to tax someone's gamblings winnings
4) its okay to keep records, use HEM, etc because the majority of non-winning players do the same
5) in the big picture, it's not in CRA's best interest to have winning poker players pay taxes because it opens the door for losing gamblers to claim losses
6) A few big name players I know are pretty confident they dont have to pay taxes.

Google Ben Alarie "Bet on it: the taxation of online gambling" 2007
Google Kyle Wilson Vancouver Sun poker+Christian for statements from Alarie, plus Wilson himself who basically states he doesnt pay taxes. He makes a lot more at poker than 99% of us.


I've paid my taxes like a good little sheep for 5 years because I was scared, but it looks like I'm going to be filing adjustments and trying to get my money back next year. I just dont see how CRA can win in court.

That being said, *I* dont want to be that guy that goes to court.
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Old 09-17-2009, 08:44 PM   #814
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Re: Canadian Online Poker Tax Thread

#1, #2, and #4 are irrelevant.

#3 is not correct. There are cases where they have been successful.

#5 is incorrect. Taxing people who do it as a profession in no way implies that losing players can deduct losses

#6 makes no sense. So what if they are pretty confident they are poker players not lawyers.

I agree with you conclusion that paying is -EV but only because for now it seems that people can get away with it but there is no question that professional players are legally required to pay income tax on winnings.
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Old 09-17-2009, 09:25 PM   #815
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Re: Canadian Online Poker Tax Thread

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Originally Posted by Equal View Post
I hate to be a shiitdisturber, but I've done a lot of research over the last five years, and I'm leaning towards not paying next year. I think we've all been idiots basically, paying our taxes.

I dont have time to detail everything but basically:

1) never call it income, only call it gambling winnings
2) you "play whenever you feel like and dont play when you dont"
3) CRA has lost every time its tried to tax someone's gamblings winnings
4) its okay to keep records, use HEM, etc because the majority of non-winning players do the same
5) in the big picture, it's not in CRA's best interest to have winning poker players pay taxes because it opens the door for losing gamblers to claim losses
6) A few big name players I know are pretty confident they dont have to pay taxes.

Google Ben Alarie "Bet on it: the taxation of online gambling" 2007
Google Kyle Wilson Vancouver Sun poker+Christian for statements from Alarie, plus Wilson himself who basically states he doesnt pay taxes. He makes a lot more at poker than 99% of us.


I've paid my taxes like a good little sheep for 5 years because I was scared, but it looks like I'm going to be filing adjustments and trying to get my money back next year. I just dont see how CRA can win in court.

That being said, *I* dont want to be that guy that goes to court.
Consider this though:
1. What you call it means nothing - The CRA looks at substance not labels.
If they think it is income they will want a cut.
2.The tax act is clear that business income is taxable so if you fall into the criteria in their opinion then they may want a cut.
3. While the CRA has so far lost the cases, the courts accepted the concept of a professional gambler (just not in these cases).
4. This said, income is not always incidental to entertainment as the articles state. If the courts recognize the concept of a professional gambler then that can't always hold.
5. It is true that the courts have set the burden of proof higher in gambling cases because of history and public perceptions (a reason why the CRA has lost so far, and I have acknowledged this before here) BUT since the last court cases a lot has changed in society. TV, internet poker and a more knowledgable public means recognition of professional gambling more widely known and accepted and more people in society living off poker. This may lead future courts to more readily accept poker as a business and change the burden of proof the CRA has to reach.
6. Thus, relying on precedent in this area is hazardous and potentially expensive.
7. The CRA has in the past made its case poorly and there is no assurance they will continue to.
8. The idea that the CRA fears masses of people writing off losses has no merit. A blanket denial of losses unless you have previously declared income is trivially easy.
9. The reasons the CRA is not going after people are lack of resources, lack of political will, the difficulty in getting strong cases and respect for the public perception that most gambling is taxfree, not anything to do with the law or precedent.
10. While 99% of players are not taxable, there are some and they should realize that they are shielded by the low chance of prosecution rather than any legal basis or precedence if they don`t pay taxes.
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Old 09-17-2009, 09:33 PM   #816
TorontoCFE
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by Equal View Post
I hate to be a shiitdisturber, but I've done a lot of research over the last five years, and I'm leaning towards not paying next year. I think we've all been idiots basically, paying our taxes.

I dont have time to detail everything but basically:

1) never call it income, only call it gambling winnings
2) you "play whenever you feel like and dont play when you dont"
3) CRA has lost every time its tried to tax someone's gamblings winnings
4) its okay to keep records, use HEM, etc because the majority of non-winning players do the same
5) in the big picture, it's not in CRA's best interest to have winning poker players pay taxes because it opens the door for losing gamblers to claim losses
6) A few big name players I know are pretty confident they dont have to pay taxes.

Google Ben Alarie "Bet on it: the taxation of online gambling" 2007
Google Kyle Wilson Vancouver Sun poker+Christian for statements from Alarie, plus Wilson himself who basically states he doesnt pay taxes. He makes a lot more at poker than 99% of us.


I've paid my taxes like a good little sheep for 5 years because I was scared, but it looks like I'm going to be filing adjustments and trying to get my money back next year. I just dont see how CRA can win in court.

That being said, *I* dont want to be that guy that goes to court.
Consider this though:
1. What you call it means nothing - The CRA looks at substance not labels.
If they think it is income they will want a cut.
2.The tax act is clear that business income is taxable so if you fall into the criteria in their opinion then they may want a cut.
3. While the CRA has so far lost the cases, the courts accepted the concept of a professional gambler (just not in these cases).
4. This said, income is not always incidental to entertainment as the articles state. If the courts recognize the concept of a professional gambler then that can't always hold.
5. It is true that the courts have set the burden of proof higher in gambling cases because of history and public perceptions (a reason why the CRA has lost so far, and I have acknowledged this before here) BUT since the last court cases a lot has changed in society. TV, internet poker and a more knowledgable public means recognition of professional gambling more widely known and accepted and more people in society living off poker. This may lead future courts to more readily accept poker as a business and change the burden of proof the CRA has to reach.
6. Thus, relying on precedent in this area is hazardous and potentially expensive.
7. The CRA has in the past made its case poorly and there is no assurance they will continue to.
8. The idea that the CRA fears masses of people writing off losses has no merit. A blanket denial of losses unless you have previously declared income is trivially easy.
9. The reasons the CRA is not going after people are lack of resources, lack of political will, the difficulty in getting strong cases and respect for the public perception that most gambling is taxfree, not anything to do with the law or precedent.
10. While 99% of players are not taxable, there are some and they should realize that they are shielded by the low chance of prosecution rather than any legal basis or precendence if they don`t pay taxes.
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Old 09-18-2009, 04:58 AM   #817
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Re: Canadian Online Poker Tax Thread

I knew I'd be ripped apart, especially for 1/2/4. But whatever, I'm very confident that I've done my homework in this area very well.

Henry can you ship names of cases for your #3 point, so I can add the information to my file.
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Old 09-18-2009, 08:34 AM   #818
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Re: Canadian Online Poker Tax Thread

The first one that came to mind was the case of the gambling pool player. When I was trying to google it to get the actual case name I came across this article. Have not had time to read it yet. Not sure if I will today but http://www.gaminglawmasters.com/cana...GLv2n10509.pdf if anyone else wants to. Seems like Gowlings has an entire small department to deal with gaming issues and that they even put out a internet magazine on the subject. That link is issue #2 so I assume there must be at least one and maybe more.

Anyway the pool case was Luprypa.

There are also at least a few cases involving horse betting. Possibly TorontoCFE and TaxGuru have an annotated ITA and could supply the names. All the successful cases are old and I don't believe there has been one in at least twenty years but if you look at before 1989 you'll find some.
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Old 09-18-2009, 09:55 AM   #819
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Re: Canadian Online Poker Tax Thread

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Originally Posted by Henry17 View Post
The first one that came to mind was the case of the gambling pool player. When I was trying to google it to get the actual case name I came across this article. Have not had time to read it yet. Not sure if I will today but http://www.gaminglawmasters.com/cana...GLv2n10509.pdf if anyone else wants to. Seems like Gowlings has an entire small department to deal with gaming issues and that they even put out a internet magazine on the subject. That link is issue #2 so I assume there must be at least one and maybe more.

Anyway the pool case was Luprypa.

There are also at least a few cases involving horse betting. Possibly TorontoCFE and TaxGuru have an annotated ITA and could supply the names. All the successful cases are old and I don't believe there has been one in at least twenty years but if you look at before 1989 you'll find some.
The lead article summarizes things well.
I've dealt with Gowlings before. They are a little less hawkish on taxation than I am in this area but even they point out: Unless the gambling wnnings of the appellant are directly related to their vocation, or they are skilled pool or card players preying on unsuspecting marks, the money they win will be (almost) twice as sweet as
the money they earn (emphasis mine)

My ITA is at home but I will posta list of cases soon.
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Old 09-18-2009, 10:22 AM   #820
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Re: Canadian Online Poker Tax Thread

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I don't know. There would have to be some sort of immigration policy or the island would be population would be pretty sad.
They won't exactly need that. All they'll have to do is to force immigrants to own property on the island in order to be eligible for citizenship or residency. So due to the eventual high demand on real estate, only multi-millionaires will be able to afford living there. As for the rest of us, it would be more worth it to pay taxes on our winnings than to pay the mortgage on property owned in that island.
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Old 09-18-2009, 12:04 PM   #821
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Re: Canadian Online Poker Tax Thread

I have a list and extensive analysis of all the cases--I use it as a building block in providing legal opinions on the matter.

The cases sort out as follows:

1) taxable gambling gains---just a few---Luprypa (pool player); Dowling (pro golfer on golf games); one horse race gambler (forget the name off the top of my head---based on inside information); one from very long ago based on "cards and dice" but this was prior to many later precdents that reversed

2) non-taxable gambling gains----by FAR the bulk of authority (12-15 cases I think), though the judges have a penchant for saying stuff like---UNLESS you're a professional card player... but it seems they never find this to be the case... leading case is Leblanc (2006)

3) deductible gambling losses---this is a NULL set---there are no cases where the courts have allowed losses

4) non deductible gambling losses---there are a few cases where taxpayers claimed to have a system for gaining from gambling, etc., but these were all denied

Piecing these together, a story emerges that there is a theory of taxation based on being a business, but that NO ONE--not even the courts at this point---can pin down precisely where that line is...
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Old 09-18-2009, 12:17 PM   #822
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Re: Canadian Online Poker Tax Thread

Leblanc was such a train-wreck of a situation for everyone involved. Brian and Terry pretty much forced CRA to go after them. They then set it up so that if they were found to be pros they would be on the hook for a lot more than they should have. CRA completely mishandled the expert testimony and that confused the judge who really didn't understand sports betting to begin with. I think it was incorrectly decided although I'm happy with the outcome.
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Old 09-18-2009, 01:40 PM   #823
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Re: Canadian Online Poker Tax Thread

I think what Equal says has a lot of merits even though you could rebutt many of his presumptions. Henry and TorontoCFE both have very good knowledge and what they say are academically and theoratically correct. But the basic line this this, WHY PAY NOW? Even if you do not pay taxes now, I think you have a good argument that you did not know you had to pay. So you are unlikely to pay any punitive damanges. You are mostly likely just pay your unpaid retroactive taxes. And there's a great chance you never have to pay taxes and not hear a single word from CRA. So why pay now ? There's no reason. You pay just in case something goes wrong ? But its not like it's 10 % taxes.. It's ****ing 40 % . Even if you reduce it you are likely to pay at least 25 %. Def -EV to pay taxes now.
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Old 09-18-2009, 02:03 PM   #824
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Re: Canadian Online Poker Tax Thread

My position has been that you should not pay unless you are motivated by morals to do so or if you are such a worrywart that it will lead to major anxiety. I don't and I have been at this longer than probably anyone in this topic. TorontoCFE and TaxGuru might be limited by the ethics of their profession in so much as I'm pretty sure they can't actually advise someone to break the law but since I don't actually work I have no such restriction. These are two different conversations and I never meant to imply that anyone should be declaring their winnings as income even though I believe they are legally required to do so.
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Old 09-18-2009, 03:10 PM   #825
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Re: Canadian Online Poker Tax Thread

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My position has been that you should not pay unless you are motivated by morals to do so or if you are such a worrywart that it will lead to major anxiety. I don't and I have been at this longer than probably anyone in this topic. TorontoCFE and TaxGuru might be limited by the ethics of their profession in so much as I'm pretty sure they can't actually advise someone to break the law but since I don't actually work I have no such restriction. These are two different conversations and I never meant to imply that anyone should be declaring their winnings as income even though I believe they are legally required to do so.
Henry is the man.... this is basically all I need to know
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