Quote:
Originally Posted by Henry17
Actually the opposite is true. If you don't tell a professional poker player that they legally have to declare the income and pay taxes on it you would be negligent. That professional poker players are required to pay income tax in Canada is not open to debate.
Henry, it's not that simple. It's a complicated question in terms of the legal theory, as the paper the Professor posted the link to outlines, and the practical aspect even moreso. Any advice given would have to take into account the consequences of any action/inaction, whether the person would be looking at a prosecution or just an audit, what penalties they might face should CCRA rule against them.
If you're correct on the bare statement "professional poker players are required to pay income tax in Canada" (presumably you meant on their net poker winnings), that's really just the first of many, many steps in the process of giving actual practical advice. The big question is, are you a professional?
Lots of people who think they are really aren't -- they fish out in a tournament and score a big win, but basically are marginal players on a day-to-day basis. If Chris Moneymaker or Jamie Gold were Canadian, would they have been considered professional poker players one year after their WSOP win? I don't know that the answer would obviously have been "yes" -- they were both outmatched after about day two, and basically lucked their way into their titles.
For 99% of "professionals", there are so many ways around whatever position CCRA would take that it would make your head spin. At the end of the day, when it comes to giving legal advice, the answer in the classroom is the starting point, not the end point.
As for the guy who said I should read the entire thread, no, I don't believe I will. I spend pretty much every day in a courtroom, so I'm not interested in reading hundreds of pages of opinions on legal matters by people with no legal training.
Bottom line: if you're making a lot of money playing poker, and you want advice on the tax implications, don't ask a professor, don't ask a lawyer who doesn't specialize in tax (like me), and for Christ's sake, don't post on an internet forum. Go see a lawyer who practises in the area of tax law.