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Old 09-21-2011, 02:06 PM   #1751
brizzybreeches
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Re: Canadian Online Poker Tax Thread

Hello!

I tried searching for this answer, but the thread is really long

Lets say a Canadian citizen - currently living in the US - returns to Canada, signs a lease, and gets a utility bill. He gets a poker account created for the address in Canada. He then returns to the USA to play poker on that site via VPN.

1) Is anything seriously illegal going on here? Or is the only entity being fooled the poker site and not the governments?

2) Who should be getting paid taxes? The poker player technically is playing from Canada (through paperwork, etc), but in reality he lives in the USA.
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Old 09-21-2011, 08:35 PM   #1752
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Re: Canadian Online Poker Tax Thread

Have any online Canadian poker players been penalized for not paying taxes? It's a gray area after all, so if they were to be audited, they could simply pay the past taxes, right?
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Old 09-22-2011, 01:11 PM   #1753
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Re: Canadian Online Poker Tax Thread

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Originally Posted by fizzypants View Post
Have any online Canadian poker players been penalized for not paying taxes? It's a gray area after all, so if they were to be audited, they could simply pay the past taxes, right?
Back taxes plus interest
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Old 09-22-2011, 01:15 PM   #1754
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Re: Canadian Online Poker Tax Thread

It really depends on the situation. I would expect at least back taxes, interest, an some level of penalty although likely a smaller amount than normal.

If they felt like you actively tried to hide the income then that is going to be a lot worse.
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Old 09-22-2011, 02:57 PM   #1755
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Re: Canadian Online Poker Tax Thread

This has been covered a million times. No. The onus is completely on you to prove the source of the funds. CRA doesn't even need to establish that you play poker. All they need to establish is that you have fund and a lifestyle that can't be explained by your reported income and after that it is completely on you.
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Old 09-22-2011, 06:18 PM   #1756
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Re: Canadian Online Poker Tax Thread

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Originally Posted by brizzybreeches View Post
Hello!

I tried searching for this answer, but the thread is really long

Lets say a Canadian citizen - currently living in the US - returns to Canada, signs a lease, and gets a utility bill. He gets a poker account created for the address in Canada. He then returns to the USA to play poker on that site via VPN.

1) Is anything seriously illegal going on here? Or is the only entity being fooled the poker site and not the governments?

2) Who should be getting paid taxes? The poker player technically is playing from Canada (through paperwork, etc), but in reality he lives in the USA.
Why sign a lease? Just rent a mail box and have your mail forwarded to the US.

There's a chance that you may have to pay Canadian taxes too if you establish residence here.

http://www.taxtips.ca/personaltax/whopaystax.htm
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Old 09-23-2011, 02:23 AM   #1757
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Re: Canadian Online Poker Tax Thread

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It really depends on the situation. I would expect at least back taxes, interest, an some level of penalty although likely a smaller amount than normal.

If they felt like you actively tried to hide the income then that is going to be a lot worse.
I was certain I read a post from Benjamin Alarie in this thread where he said the specific examples he's aware of the person just had to pay back taxes. No penalties or interest.

Do you have some specific examples to back this up?
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Old 09-23-2011, 10:20 AM   #1758
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Re: Canadian Online Poker Tax Thread

Can you rely 100% on the advice/knowledge of a Canadian tax lawyer with respect to taxes?
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Old 09-23-2011, 10:38 AM   #1759
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Re: Canadian Online Poker Tax Thread

ebffs,

With the exception of two all recent disputes of this nature are not public but yes CRA has gone after more than just the back taxes. It is like anything else in that how strong their case is and how willing you are to deal will impact the result. Over time as they have more success they will demand more and more. Further, when they do a quality of life assessment and assign a number my experience has been that they greatly overstate what they believe your unreported income was. The onus is then on you to establish that they are wrong which can be pretty difficult. This is true not only in gambling situations but also in just working under-the-table cases as well.

fizzypants,

No. Lots of lawyers are morons. As a professional profession law actually has the highest concentration of ******s.
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Old 09-23-2011, 10:56 AM   #1760
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Re: Canadian Online Poker Tax Thread

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fizzypants,

No. Lots of lawyers are morons. As a professional profession law actually has the highest concentration of ******s.
That is awful then. If the lawyers don't know about it, who would? It all comes down to personal interpretation of the unclear laws then I guess? And those would differ from person to person. So how is one supposed to know if their interpretation would be the same or different than that of the CRA? Sickening.
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Old 09-23-2011, 11:23 AM   #1761
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Re: Canadian Online Poker Tax Thread

The law is in no way unclear. People who play professionally have to pay income tax and people who play recreational don't.

What is unclear is a question of what is a professional. CRA has released a informational bulletin that sets out a four part test which is pretty useful in this respect. There is a small gray area of players where it is hard to figure out what side they fall on but for most players it is not difficult at all.

That being said simply because someone should be legally paying tax does not mean that they will lose. CRA in the two attempts at going to court have completely ****ed it up because they are incompetent. In both cases the gambler should have lost but nevertheless won because CRA dropped the ball.
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Old 09-23-2011, 11:25 AM   #1762
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Re: Canadian Online Poker Tax Thread

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Originally Posted by Henry17 View Post
CRA has released a informational bulletin that sets out a four part test which is pretty useful in this respect.
Where could we find this?
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Old 09-23-2011, 11:45 AM   #1763
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Re: Canadian Online Poker Tax Thread

It has been linked to multiple times in this topic
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Old 09-23-2011, 11:46 AM   #1764
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Re: Canadian Online Poker Tax Thread

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It has been linked to multiple times in this topic
Shall find it, thanks.
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Old 09-24-2011, 05:36 PM   #1765
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Re: Canadian Online Poker Tax Thread

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Originally Posted by JustLurking View Post
Why sign a lease? Just rent a mail box and have your mail forwarded to the US.

There's a chance that you may have to pay Canadian taxes too if you establish residence here.

http://www.taxtips.ca/personaltax/whopaystax.htm
But from what I understand, you need a utility bill and photo ID to start playing at poker sites from Canada. Don't both of these necessitate having one's name on a lease first? i.e. a PO box isn't enough in this case?
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Old 09-24-2011, 07:34 PM   #1766
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Re: Canadian Online Poker Tax Thread

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But from what I understand, you need a utility bill and photo ID to start playing at poker sites from Canada. Don't both of these necessitate having one's name on a lease first? i.e. a PO box isn't enough in this case?
You may be right, I opened my acct. a long time ago and nobody asked me for anything back then.

I've had my license addressed to a mailbox and all my credit card bills were also sent it for a few years in both AB and ON because I was moving around a lot, so it's possible to do it (though not 100% legal).

All the mailbox places I've dealt with will let you address your mail as Apt-# or Suite-#, and you can sign a release if you want them to sign for fedex or something. You can also get a cell-phone but I don't know if they'll accept a cell-phone bill as a utility bill. I haven't pay the utilities in most of the places I live in, so you can always tell them you're in the same situation.

I guess you can always come up here, get a temporary place to stay in, set things up, pay some bills, then change everything over to the mailbox and move back when you know you can do a withdrawal. (The economy can always use another contributor).
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Old 10-06-2011, 05:41 PM   #1767
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Re: Canadian Online Poker Tax Thread

How do professional poker players fill out passport applications when they ask for occupation+field of employment?
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Old 10-07-2011, 09:53 AM   #1768
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Re: Canadian Online Poker Tax Thread

I just did this recently and yet I don't remember.
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Old 10-07-2011, 10:13 AM   #1769
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Re: Canadian Online Poker Tax Thread

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How do professional poker players fill out passport applications when they ask for occupation+field of employment?
How about the last 'real' job you had?
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Old 10-07-2011, 10:18 AM   #1770
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Re: Canadian Online Poker Tax Thread

I learned my lesson after telling the custom's people that I was retired despite clearly being in my 20s so I stopped doing that and just started telling them I finished law school and just need to do my articling and pass the bar before I'll be a lawyer. Technically all true.
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Old 10-07-2011, 10:54 AM   #1771
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Re: Canadian Online Poker Tax Thread

Last time I came back from the US in my car, the border guard wanted to talk about Poker after I told him that I was in Vegas and LA playing poker. He didn't understand that I didn't want chat to be friendly after he spend an hour tearing apart my car looking for stuff.

But, it's still better then when I was going south, the US border guard went for his gun when I started to step out of the car to open the trunk after he asked me to open it. (Then they spend the next hour tearing the car apart looking for stuff).

Last edited by JustLurking; 10-07-2011 at 10:55 AM. Reason: changed 'guy' to 'border guard' in first sentence
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Old 10-09-2011, 11:01 AM   #1772
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Re: Canadian Online Poker Tax Thread

Just curious, what's to stop someone from just leaving their funds in cyber space and withdrawing at the pace of a moderate lifestyle?

I mean even if the govt got curious about your income, I doubt they would go as far as to try to get pokerstars or whoever you play under to reveal your online bankroll. Which brings up another question too, if they did.. do you think such sites would even reveal it? If they lost a player who say has a 300k+ bankroll, because he was sent to jail.. they're missing a LOT of rake.. Imo pokerstars would protect a player if the old farts at rev Canada went after him/her.

Imo if you are a pro player, keep your money in electronic form on the site, don't make any big purchases you can't explain. ez

I would also be extremely aggressive in making it clear that poker earnings are money for WORK, even if it was brought up that I am a professional player. Ask any pro poker player about swings, and they can tell you as we know that the swings are insane at times.. what looks like amazing profit one year is merely a buffer for the abuse you're going to take the next and hopefully you break above even. So I can't even see how the govt can even make a case that gambling earnings should be taxable. It is pretty ridiculous and I would take it to court, because I am very assured that I would win.

Last edited by Solowins; 10-09-2011 at 11:09 AM.
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Old 10-09-2011, 11:12 AM   #1773
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Re: Canadian Online Poker Tax Thread

Yea and when you want to buy a house or something, how do you do it? Eventually the money has to get out of there.

Perhaps the only way would be to take all of it out at once and hope the CRA thinks it was a one-time thing where you binked a tourney or something. I wonder how that would work since you cannot prove you won a tourney.

Also PS would never side with the player in legal/tax matters for the sake of more rake...
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Old 10-09-2011, 11:20 AM   #1774
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Re: Canadian Online Poker Tax Thread

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Yea and when you want to buy a house or something, how do you do it? Eventually the money has to get out of there.

Perhaps the only way would be to take all of it out at once and hope the CRA thinks it was a one-time thing where you binked a tourney or something. I wonder how that would work since you cannot prove you won a tourney.

Also PS would never side with the player in legal/tax matters for the sake of more rake...
Yeah you would have to do everything unorthedox. Like for instance, if one wanted to buy a house.. it wouldn't be hard to have family pay for it then pay them after. Basically anything bought within the system can be accomplished with someone else's system spawned money, then compensated for with poker earnings. The only trouble would be for them to explain how they evened out after buying a house, so I guess that idea is out the window anyway.

Btw disclaimer: I do not advocate scamming the govt at all lmao, this is all theoretical ofc
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Old 10-09-2011, 11:32 AM   #1775
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Re: Canadian Online Poker Tax Thread

I mean I guess the only real way you could accomplish buying a house undetected would be moving in with like 4 roomates for awhile and claiming that the 4 of you work like a pyramid scheme. We had a pakistani family living next to us for awhile who did that legitimately, they just moved like 14 people into 1 house and payed it off in a year rofl, then 13 move out and onto the next one. So maybe pick up a part time job for a year and say that's what you did. Idk though, in the end it's probly best to just be honest with the govt and hope they don't bend you over in taxes.

I don't think the govt would even chase a court case against you if you planned to argue that you use your poker earnings for work only and that swings in poker can be deep at times, so what you have now is not necessarily what you will have tomorrow, or even years from now. Saying that poker money is used for work and not lifestyle is a very strong argument and like I said I think that's pretty much checkmate in terms of a court case and the govt knows it.

It would take a pretty substantial positive showing to even consider poker winnings consistantly profitable. I can see how the govt could attack someone like durrrr or similar high stakes pros, but if an average joe spikes 250k in 1 year, it's easy to just say you might get slammed next year.

Last edited by Solowins; 10-09-2011 at 11:38 AM.
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