Wagering offshore / Tax Implications

[RichieP]

Does anyone KNOW the answer to this:


I open an account with an offshore rebate house. My account goes from $200.00 to $10,000.00 in 6 months. All winnings are win bets only with NO signer exotic jobs of ANY kind.

I make withdrawls every couple of months to pay bills etc.

Am I liable for taxes on the profits made here???

Thanx in advance for any replies

Richie

[JimG]

I am not attorney or accountant so probably have no real business offering an opinion. With that said, I think that all income (defined as wins minus losses) from gambling is supposed to be reported for tax purposes and customary expenses subtracted from them. The amount of expenses depends on whether you call yourself a professional gambler to the irs.

Under your scenario, I would think it does not matter whether offshore or not as there are no "signers". "Signers" of course send a message to the irs that you have collected gambling winnings. Many play offshore because no report form is sent to irs for these "signers" With US-based companies the proper form is sent to IRS and you get a copy at beginning of calendar year.

If no ss# is taken at the time you sign up for an offshore account it would be difficult for irs to trace, but not impossible if they flag your income tax reporting/non-reporting for some other reason. They could potentially look into your bank deposits and endeavor to find out where the money came from.

PS...I just re-read your message and saw you put "KNOW" in all caps. Therefore I probably should not have answered with my opinon, but what the heck.