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Old 12-20-2011, 04:09 PM   #1876
abandonedepsilon
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Re: Canadian Online Poker Tax Thread

This is the most controversial conclusion I've read thus far "In practice, it is unlikely that any of these options—the status quo, guidance through regulation, or the taxation of net gains—will be regarded as entirely satisfactory by policy makers or by affected taxpayers. The boundary between hobby and business in the context of gambling is perhaps destined to forever be a source of controversy."
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Old 12-20-2011, 04:18 PM   #1877
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Re: Canadian Online Poker Tax Thread

abandonedepsilon,

I wouldn't put much value in that article. It likely got published because it is an interesting topic but the level of analysis is quite bad.
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Old 12-20-2011, 06:52 PM   #1878
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Re: Canadian Online Poker Tax Thread

Thank you Henry.

If anything the papers he is producing is telling us that after all this time there has still not been one successful case of a person being forced to pay taxes on his poker winnings. I'd say that is pretty damned good, but why did Globe and Times publish "Read it and weep" http://www.theglobeandmail.com/news/...ticle1509810/? And to hit that same note, why was the conclusion to such a solid article title so shady? "The Supreme Court of Canada has repeatedly insisted that, as a self-assessing system, Canadian income tax law should be certain, predictable and fair. It seems the current unarticulated approach to the taxation of poker winnings is uncertain, unpredictable and unfair."

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Old 12-20-2011, 07:15 PM   #1879
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Re: Canadian Online Poker Tax Thread

You are confusing the lack of a successful court case with no successful case. The two are not the same. There are plenty of cases where professional gamblers have had to pay income tax.
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Old 12-20-2011, 07:21 PM   #1880
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Re: Canadian Online Poker Tax Thread

Just to be clear Henry17 got a Bachelor degree and is currently an e-prof. Benjamin Alarie is an actual prof. I got a masters in chemistry, but I don't go on medical forums and express opinions on Pharmaceutical synthesis like I'm the authority on the subject. If I were to attempt to critique a publication, I would do so by pointing out very specific ideas and encouraging actual debate.

For sure it's important to be a critical thinker, but it's pretty pretentious to just say things like "I took a fast look-this article will be misunderstood," "the level of analysis is quite bad" ect without any elaboration.

Why do you think people will care that you think an article is poorly written if you don't give specific details on your thoughts?

I honestly haven't had time to read the article so I have no opinion either way about the quality of the piece. One thing that is certain is that your latest posts have contributed nothing of value for anybody with respect to understanding its merit.

I'm assuming the Canadian tax journal is peer reviewed. I'm certain with a bachelor degree you are not qualified as a peer. So how exactly and specifically did the reviewers of this article err in accepting this for publication?
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Old 12-20-2011, 07:34 PM   #1881
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Re: Canadian Online Poker Tax Thread

It's not non-sensical to point out that in Epel and Leblanc that the courts accepted testimony from experts retained by the taxpayers. I just don't know how far you can credibly push that observation given the pattern of results over many many reported litigated cases.
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Old 12-20-2011, 07:56 PM   #1882
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Re: Canadian Online Poker Tax Thread

ebffs,

I thought I did explain why I disagree a few posts up.

TaxGuru,

In Epel the judge specifically draws a clear distinction between Turmel and Epel. If a poker player is like Turmel then that poker player must pay income tax on his winnings -- John does. If a poker player is like Epel then he does not. With respect to the law this seems very clear. Poker winnings are taxable

The question of is a poker player like Tony Epel or like John Turmel isn't a legal question but rather a finding of fact. In the Epel case this finding of fact respect almost completely on John Turmel's opinion of Tony's playing. Had Turmel testified that Epel had the characteristics of a professional player then he would have been subject to income tax.

CRA dropped the ball in not countering with their own experts and I'd say they dropped the ball in allowing John who ran the local private game that Epel played at to be an expert witness. A lot of this though was because CRA wasn't all the interested and further because it was a private game the ability to get information on Epel's play was rather limited. If CRA ever takes an interest in getting professional poker players and actually behaves competently or if we have a case involving an online player the results will be very different.
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Old 12-20-2011, 08:13 PM   #1883
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by Henry17 View Post
ebffs,

I thought I did explain why I disagree a few posts up.

TaxGuru,

In Epel the judge specifically draws a clear distinction between Turmel and Epel. If a poker player is like Turmel then that poker player must pay income tax on his winnings -- John does. If a poker player is like Epel then he does not. With respect to the law this seems very clear. Poker winnings are taxable

The question of is a poker player like Tony Epel or like John Turmel isn't a legal question but rather a finding of fact. In the Epel case this finding of fact respect almost completely on John Turmel's opinion of Tony's playing. Had Turmel testified that Epel had the characteristics of a professional player then he would have been subject to income tax.

CRA dropped the ball in not countering with their own experts and I'd say they dropped the ball in allowing John who ran the local private game that Epel played at to be an expert witness. A lot of this though was because CRA wasn't all the interested and further because it was a private game the ability to get information on Epel's play was rather limited. If CRA ever takes an interest in getting professional poker players and actually behaves competently or if we have a case involving an online player the results will be very different.
These are the posts I enjoy reading. I do appreciate all the contributions you've made in this thread Henry.

Thing that gets me with this whole issue are the Canadians who publicly out themselves as professionals and millionaires and at the same time are open about not paying a penny of tax.

http://www.torontolife.com/daily/inf...09/poker-face/

Until we start seeing some examples getting made with the high profile players I expect it to be hard for most low 6 figure grinders to justify paying nearly 50% of their earnings in tax
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Old 12-20-2011, 08:43 PM   #1884
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Re: Canadian Online Poker Tax Thread

That link seems to link to the most recent edition of Toronto Life. I have not read it but assuming it is some poker pro bragging about how much he makes the odds that he will get attention are high -- if he further brags about not paying income tax he is 100% screwed.

If we return to the Leblanc case the reason those two morons drew the attention of CRA relates to one of them pathetically trying to get a stripper. That led to the stripper stealing from them. That led to media. The media is what led to CRA showing up. The Leblancs were actually done as sports betters even though they hadn't come to terms with that yet. The vast majority of the winnings had completely gone unnoticed and they could have just retired without it having ever being an issue but they got into the media and almost instantly CRA showed up.
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Old 12-20-2011, 09:28 PM   #1885
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Re: Canadian Online Poker Tax Thread

But these articles are coming out all the time:

http://www.canada.com/vancouversun/n...a-3b391dc8af9e

This was years ago. This guy paying tax now? I'd really love to get even a crude estimate of how many really high stakes millionaires from online poker are paying tax. Also how so many of them who aren't are still getting away with it. It's not like it's a secret these guys are out there.

In this article it is directly implied that this guy pays no tax. Should this guy be 100% busted by now?

"Gambling winnings -- Wilson prefers not to call it income -- are not taxable in Canada. In the U.S., major wins are taxable and losses can be written off against those winnings."

Last edited by ebffs; 12-20-2011 at 09:39 PM.
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Old 12-20-2011, 10:26 PM   #1886
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Re: Canadian Online Poker Tax Thread

I have no idea. I just know that the Leblancs had been at it for years without any attention and then they got some media attention and next thing you know CRA shows up.

My views on the public service are not really a secret and while I think the CRA staff is a million times better than your average public servant in the end they are still public servants. Combine that with poker historically being nothing and even now really still very much negligible it simply isn't a priority. Every case I know of either resulted from media attention or from something unrelated to gambling resulting in the discovery of the gambling.
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Old 12-20-2011, 11:26 PM   #1887
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by ebffs View Post
But these articles are coming out all the time:

http://www.canada.com/vancouversun/n...a-3b391dc8af9e
I've heard from a few different reliable sources that this guy was very soon-after looked into by the CRA.. and from what I've heard, they stripped him of a ton ($2m+ IIRC) all while he was in the midst of a divorce and it left him pretty busto. The details are foggy (as I was told about it long ago).. but I'm fairly certain this happened. I've always been curious why it's never been discussed in this thread but its possible that it was extremely private stuff and the details were leaked to me though friends.. (again, it was years ago and I don't even remember specifically which friends told me..)
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Old 12-21-2011, 12:50 AM   #1888
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Re: Canadian Online Poker Tax Thread

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I've heard from a few different reliable sources that this guy was very soon-after looked into by the CRA.. and from what I've heard, they stripped him of a ton ($2m+ IIRC) all while he was in the midst of a divorce and it left him pretty busto. The details are foggy (as I was told about it long ago).. but I'm fairly certain this happened. I've always been curious why it's never been discussed in this thread but its possible that it was extremely private stuff and the details were leaked to me though friends.. (again, it was years ago and I don't even remember specifically which friends told me..)
Wow, sucks for him. This is exactly the type of information I was looking for though, thanks.

Also Henry, I'm busting your balls a bit obviously but I've been following this thread for a long time and I've def. learned a lot from your posts.
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Old 12-21-2011, 07:54 PM   #1889
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Re: Canadian Online Poker Tax Thread

Can you cite some cases where people were running poker businesses and have had to pay taxes to the government?
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Old 12-21-2011, 08:13 PM   #1890
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Re: Canadian Online Poker Tax Thread

There are no such reported cases.
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Old 12-21-2011, 08:20 PM   #1891
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Re: Canadian Online Poker Tax Thread

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There are no such reported cases.
So, with situations like the Vancouver resident Kyle Wilson, who allegedly had to pay up millions in tax, that should be on public record correct? How can someone verify that this actually happened? Does a lack of public record imply it didn't happen?
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Old 12-21-2011, 08:29 PM   #1892
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Re: Canadian Online Poker Tax Thread

If it wasn't litigated in the courts it would not be a reported case.
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Old 12-21-2011, 08:31 PM   #1893
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Re: Canadian Online Poker Tax Thread

Some countries report on all taxpayers' assessments, but not in Canada.
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Old 12-21-2011, 08:55 PM   #1894
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by ebffs View Post
So, with situations like the Vancouver resident Kyle Wilson, who allegedly had to pay up millions in tax, that should be on public record correct? How can someone verify that this actually happened? Does a lack of public record imply it didn't happen?
There are plenty of people who have paid their taxes, either voluntary or after a visit from the CRA. I'll be involved in an audit of one tomorrow.

You only hear about people who fight it to the stage of taking it to court.
99% of tax issues are resolved before that.
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Old 12-21-2011, 10:40 PM   #1895
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Re: Canadian Online Poker Tax Thread

Why does Henry keep saying that there ARE cases where people were running poker businesses and had have to pay for it?
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Old 12-21-2011, 10:40 PM   #1896
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by Henry17 View Post
You are confusing the lack of a successful court case with no successful case. The two are not the same. There are plenty of cases where professional gamblers have had to pay income tax.
See right here.
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Old 12-21-2011, 11:42 PM   #1897
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Re: Canadian Online Poker Tax Thread

It was already explained. Only cases that are litigated are reported. The vast majority of cases are not litigated. There is no record of these cases.
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Old 12-22-2011, 12:28 AM   #1898
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Re: Canadian Online Poker Tax Thread

There has to be SOME proof.
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Old 12-23-2011, 12:31 PM   #1899
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Re: Canadian Online Poker Tax Thread

I spoke to a fairly high up person in the audit department yesterday.

This is only their opinion, but the impression I got was that the CRA is well aware of the professional poker player issue, however the legal people there have not yet figured out how to convince the courts. Until that happens, the auditors are having a hard time getting the resources dedicated to go after people.

Because auditors have to justify their time and cost, the higher ups are not signing off on the push because of the view that people will fight the audits in court where costs will go up and the outcomes are not certain. The view is that the audit resources can be used more cost effectively elsewhere.

This would change if the CRA's scarce legal assets find the time and ideal case to win in court.

There is no known time frame on this - this particular person's view was that the next court challenge is 5 years away unless something changes. Because they think the size of the pro pool decreased after the US crackdowns and poker's general decline in popularity, this has dropped way down their to do list and may never happen.

The CRA will though go after pro players if they are already being audited since there is no additional cost to go after that income.
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Old 12-23-2011, 03:42 PM   #1900
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Re: Canadian Online Poker Tax Thread

I can't find any info on this so I will ask here.

How are Bad Beat Jackpot wins(or Royal Flush wins on 888.com) treated with regards to someone who is a professional player? They are essentially a lottery game disguised as poker with very little skill involved to win. You essentially pay 5 cents per hand at a 10man table to buy a lottery ticket to try to win part of the jackpot.

If someone who is a pro poker player wins the 6/49, they would not have to pay any taxes. I'm also curious how the Bad Beat (or Royal Flush) rake would be dealt with.
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