I've PM'd a few people, but figured I'd make a formal thread about this. I really don't know if this is the logical forum for it - any other suggestions would be appreciated.

Long story short - I played about $3000 worth of tourneys (and lost about $500 in the pit / playing the tables), but cashed for $11,000 in the tourneys. Net gain of $7,500.

One of the tourneys had $2,100 withheld. ($7,100 score before taxes)

"Refund Management Service" has sent me some paperwork, but it seems to indicate that I need to have losses in excess of the $7,100 in order to be eligible to reclaim the $2,100 I paid in taxes.

So this tells me that the only way to get taxes back is if you're a net loser, which doesn't make much sense to me. I would have figured that if you've lost more than the taxes paid you'd be eligible to receive some of the money back.

I'm trying to decide if it's even worth my time pursuing the situation.

Anybody have any first-hand experience here?

Many thanks...

OT

OT,

Dont use RMS, its not that difficult to arrange yourself and they charge a ridiculous vig.

Good info here:

http://www.pokerforum.ca/f10/guide-r...xes-usa-19432/

A withholding tax trick: EVERY time you're in Vegas collect as many losing sportsbook receipts as possible.

Use these to claim back against your poker winnings as gambling losses.

Ya, great advice.

Except for the fact that you would be committing tax fraud by claiming receipts that are not yours against your taxes.

It's possible no one would ever look twice but if you only have losing receipts, with a wide range of dates, times and sized bets, different types of bets and no winning receipts, it's going to look suspicious.

Anyone who bets sports regularly keeps their losing receipts, they make similar sized and type bets (usually) and they have winning receipts also.

if you use a bunch of losing sports bets slips to offset poker winnings, someone is going to look deeper.

The people who run audits have seen this type thing before.

Someone will tell you that you can get away with this and you possibly can but the penalties you could incur if you get caught are going to sting a lot more.

So I shouldn't use the $25,000 superbowl ticket that I found?

Seriously though, the answer seems to be that unless I made another trip to Vegas / the US and played some tourneys (and lost), I'm SOL in terms of getting any of my 2k back...

That - well - sucks.

OT

I'm not exactly sure on the tax rules with foreign tax, but with only $7,500 in earnings if you file a tax return you should get all of the $2,100 in paid taxes back. I know it would work this way if you were a citizen, but we might stick it to foreigners?

As a Canadian, you are entitled to pay 30% of your net gaming win to the IRS.

You are up $7500 from your trip to the States (via gaming activities). You *should* be paying the IRS $2250. However, they have only withheld $2100. Be thankful that they aren't tracking everything and taxing it all.

Did you tell RMS about the backers that you had? (Yes, I read your trip report.) Can you claim that only 50% of that win is yours, since you gave the other 50% to your backer?

as a canadian with both a canadian and italian pssport, would it be better for me to show my italian id after a score in the us???? i also have a german drivers license from when i lived in germany. i could use that too...
do italian citizens and other europeans get withheld 30% like we canadians do??

A drivers license won't do it - you need to show proof of citizenship, and most casinos that I've seen insist on a passport for tourney winnings. (that said my buddy used his DL for a high-hand jackpot).

I don't know the rules for italians. I know that Brits don't get taxed, but Brazillian's do. It all depends on the country of origin - there are different rules everywhere.

OT

Canadians don't pay US income tax, so there's no reason he should be paying tax on his winnings. Canada has a tax treaty with the US and OP will be able to recover all of his funds after doing the required paperwork.

ok how?

A lot of misinfortmation above.
The american-canadian tax treaty forces Canadians to be taxed as Americans for poker winnings. That means you have to declare any winnings as income and you can write off poker losses against gains. The only way you don’t pay taxes is if you declare you have certain casino game losses at least as large as your poker winnings (a sketchy accountant will tell you to do this as will those people you talk to if you call those "get your money back" ads at the border). The US withholding tax is suppose to be taken off any poker win over $1200 US (unless the amount has changed very recently) when you receive payment at the Casino. Some casinos don't do that. The Venetian didn't withhold tax on a $5000 win but the Bellagio did withhold on an $8000 win (and the other times I won more there). When you fill out your tax form you enter your losses and will receive a refund equal to the tax rate (30% last year) multiplied by your losses up to the amount you won. The IRS is shockingly helpful at directing you where to go to find and fill out the forms. The Canadian government doesn't take anything. Anyone who says you don’t have to pay taxes is doing something illegal or doesn’t fully understand the rules. If you have a backer there is a specific extra area that needs to be filled out indicating there tax number and how much you winnings you owed to your backer. You should get that back but then they will be subject to the tax It might be easiest just to sort that out with your backer on your own. I, of course, would fill out all paperwork due to the IRS properly as I don't feel it ever makes sense to falsify any information when it involves taxation law.


On another note, you should also keep a log of your poker results from table games. Any wins should be taxed (and I'm guessing 0-1% of Canadian players volunteer to give the IRS that info) but any losses can be deducted from winnings. A simple spreadsheet of time at table and win/losses was acceptable when I sent in my return and I did have losses on the year at the tables. That helped offset my tourney wins. I would expect that all submissions made to the IRS be up too the highest ethical standards

See above

DoGGz....I don't understand your point. You were called out for saying that Canadians can get all there money back and "there's no reason he should be paying taxes....". I explained he has to pay taxes given his situation (more wins than losses this year) unless he's doing something illegal.

My point was that he should be able to get his funds back, and that he should refer to your post about the specific regulations. I am not acutely aware of the specific laws as I'm not Canadian, so I referred him to 'see above' for a more detailed look. If you say that he won't be able to recover all of his taxes, then that refutes what I've learned from some of my Canadian poker friends.

Either case, he should talk to his accountant who should have an easy answer for him.

And I'd hardly say that refuting me on your first post without a single reference to back up your claim classifies as 'calling someone out'; I'd call it douchey.

If I'm incorrect in my knowledge, then openly correct me, but please do so in a less arrogant tone.

crapplayer, the threshold for the Venetian and the WSOP withholding tax on a poker tournament victory is a $5000 net gain over and above the buyin. I think that is the law throughout the US (aside from certain New York native casinos that apparently decide everything is taxable for Canadians).

Doggz, Canadians don't necessarily have to file a 1040NR to pay taxes on gambling winnings; that is correct. But if you have had tax withheld on a big win, Canadians do have to file a 1040NR based on their net gambling win if they want to have any of the withheld money returned to them.

The US/Canada tax treaty does not state that gambling wins in the US are exempt from US taxation for Canadian residents (unlike the 17? Eurozone countries who are tax exempt on gambling wins through their US tax treaties).

The US/Canada tax treaty does allow Canadians to net their wins versus their losses and only pay 30% on that. Most other countries (if I read last year's 1040NR correctly) had to pay 30% on winnings with NO consideration for losses. The net of wins versus losses was for Canadians only.

One nice bit in the US/Canada tax treaty does cover double taxation though ... if you have paid money to the US government and that money is taxable in Canada, you can remove the amount paid to the IRS from your taxes in Canada (since, in all likelihood, your taxes will be larger here). That doesn't apply to most Canadians with their gambling wins, since you have to be a professional gambler to have your poker wins taxed in Canada (if it's a hobby, it's not taxable in Canada). If the Canadian government ever changes its mind on taxing poker in Canada, it matters because you can remove the 30% paid to the IRS from the 45% provincial/federal tax rate in Canada.

DoGGz....I apologize for being douchey. Not my intent at all. I was just trying to refer back to wavegoodbye's post (which I interpreted to mean "how does he get all his taxes back") and was probably hasty in saying he was calling you out. On another note, based on a sample size of around 5 Canadian accountants, they have no idea how to deal with US gambling gains/losses.

I know multiple Canadian pros who've ranged from not paying any taxes to paying near 40%. No surprise that accountants don't agree on withholdings.

It's also possible that there's a difference between profession and recreational gambling as it pertains to OPs concern.

I am dealing with a refund company. I am pretty shocked about how the system works. For some reason I thought Canadians could claim back the full 30% (unless they are a professional gambler).

I finally had a decent score, won ~$10K and I had $3,300 taken off me. Luckily I had enough losses so I can get back the full $3,300.


What I am really wondering, what happened to Duhamel who won the main event? He paid $3 million tax and doesn't get any of it back?

I asked the guy on the phone at Refund Services or whatever, I asked him about someone putting $1 in a slot machine and winning $1 million and he said they won't get any of it back. Isn't that crap?

Did you get this back in the end OT?

I got nothing back at all. I was basically told by the refund people that I have to have losses to offset the taxes, and unfortunately (?) my only Vegas trip in 2010 was this one - which was almost entirely profitable.

I've had friends tell me that the refund people would "take care of it" - they have a stack of sportsbook tickets that they'll use on your refund. But that's not a game I'm comfortable playing.

So unfortunately no, I've received nothing.

OT

sorry for the hideous BUMP,

one thing i wasn't sure about on the OP's question/interaction with refund management.

he suggested you can't get back a proportion of the taxes..

say you won $30k, and IRS held back $9k.... do you really need $30k of expenses/losses to get the tax back?.. i.e., is it really all or none? you get all the tax back or none of it.

thanks in advance....... p.s what are the benefits of using a service? the tax form looks pretty straight-forward (at least with the help of a book or internet resources).......... and if the IRS takes a small amount, like $2k, do they just assume you will have some expenses/losses against that? whereas if you win $5 miilion, they won't make a similar assumption

op, wouldn't you have the expenses of the trip? and the buy-ins to net out?... that would get 70% of the way to full offset.

and can't you tell the IRS you lost $3k playing cash games?...... there's a huge difference between telling IRS you lost $3k playing cash and you lost $2 million playing cash (i.e. you had a big WSOP main event score)