First post of 2011--Administrative tasks, and dealing with the IRS.

I haven't closed out 2010 yet.  I'm working on several things at once.  I just spent an hour redesigning my raw data worksheet, putting colums in a different order, adding another column (which meant I had to adjust all the column widths to make everything fit on the page), and just in general making everything for this year a little more efficient.

It's ridiculous that I should even have to mess with paper records like this, but the IRS is always a little suspicious of "gamblers"--with good reason.  In any cash business , whether it involves poker winnings, or a waitress and her tips, almost everyone underreports.  I have never done that. 

Silly, logical me, when the Bible teaches that we are to obey the governing authorities (Romans 13) and to "give to Ceasar that which is Ceasar's", I never saw much wiggle room in those instructions.  I have reported, and will contine to report, everything.  In 2010 I earned two $10 frequent player bonuses from PokerStars, and they will be reported on my schedule C, along with my other wins and losses.

I could just order a giant spreadsheet from PokerStars and send it directly to an IRS auditor without unzipping it.  Believe me, that sheet will tell them everything that I ever did on PokerStars, right down to the date, hour, minute and second that I earned every FPP (frequent player point).  I'm sure that an auditor would have fun with it--if I remember correctly, my PokerStars spreadsheet for 2009 was about 100 pages (on my monitor, the pages were not numbered) long and 50 columns across.

There is one reason that I can see why they might want paper records, rather than (or perhaps in addition to) electronic records.  Many players, myself included, play both live and online.  When you play online, you're back to the problem of dealing in a strictly cash business.  Unless you take money out of an ATM at a casino, there are no electronic records when playing live.  You buy your chips with cash at the casino, and you turn in your chips, or your tournament result,  for cash when you are ready to leave.  (The only exception is that a casino can give you a check, and is required to issue a tax form, if you win several thousand dollars in a tournament).

Of course, there are still ways that the IRS can check you out.  They can talk to people at a casino (or in my case, the local charity poker rooms) to see how often I am there, whether I usually win or lose, etc.  But it's much like the case of the waitress and her tips--there are no records other than the ones that the players are supposed to keep, so the IRS can never know for certain.

I'm not really worried about any of that.  With my good records, plus my history of reporting my cash income ever since I first started filing tax returns, I don't expect any problems, and I'm not the least bit afriad of an audit.