Don Baaso wrote:

- quote -

Au contrair. You're doing justice to your client, and is
our ultimate duty.

form 8275 is only pertinent if you have a reasonable chance
of success. maybe my term is not the correct one, but you've
read the instructions, so you know what I mean.

You say the documentation does not meet IRS requirements?
Does client have other proof, e.g. cashing checks at casino
or using a debit card therein?

Tough call, I know. I'm interested in seeing what others
say too.

Oh; what about an extension on April 15th? (grin

Cheer$$$,
Harlan Lunsford, EA n LA

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Don Baaso <thetaxdonNS[at]comcast.net> wrote:

- quote -

That might be "overkill." But, I would ask the client to provide
a WRITTEN statement that briefly describes:

1) The nature of his gambling activities for the year,

2) The amount of his "wins" (both reported and unreported),

3) The amount of his "losses" (not just "more than what I won"),

4) A list of available records.

Based on that (assuming acceptable/plausible answers), I
think you have done sufficient "due diligence."

Since gambling losses are an itemized deduction, I ~think~
the issue is adequately disclosed so long as it is clearly
identified on Schedule A. I believe the IRS publishes a Rev
Proc (or similar document) every year or two that describes
the adequacy of disclosure for various common items (but I
don't have time to look that up right now <g> ).

But, one final comment: Based on what I've learned from a
couple of avid gamblers over the years, $5,000 of
"unreported" wins on top of $150,000 "reported" sounds a
little low. However, I suppose this all depends on the types
of games played, size of wagers, etc.

MTW

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My client has 50 W-2Gs totaling $150k and says his losses
exceed his wins. His documentation is the casino statement
based on his player card data. Problems:

1. This documentation does not meet IRS requirements but
might be accepted on a potential examination.

2. The casino statement does not define how the data is
computed to arrive at their figures. i.e.. are playbacks
and/or jackpots included? Also, the statement has two
numbers, "coin in" and "coin out", lumping the whole year.

3. If the IRS were to disallow the deduction in whole or in
part, there could be substantial penalties and interest.

My current thinking is to have client sign a "release of
liability" for any consequences relating to this return, and
to include form 8275 with the return disclosing the
documentation used for the losses.

I had the client estimate ($5k) his non W-2G wins and am
including this in the total.

I'm thinking about this return way too much.

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