- 4 -
20 to 25 hours a week playing the slot machines at Smith’s. All
of her gambling occurred after the flower shop was closed for the
evening. Smith’s was on the route petitioner traveled from the
flower shop to her home.
During 2000, petitioner contacted an Internal Revenue
Service (IRS) agent for information on how to file her income tax
return as a professional gambler. Petitioner never sought
information from other professional gamblers as to what was
required to become a professional gambler for tax purposes. She
was reluctant to publicize her status as a professional gambler
because of a perceived stigma attached to that occupation. She
discussed her tax status as a professional gambler only on one
occasion with an IRS agent. She was advised by the agent to
simply file a Schedule C with her income tax return and was
advised of her responsibility to pay self-employment taxes on any
profit realized. Because petitioner reported a loss on her 2001
return, she did not pay any self-employment taxes.2
On Schedule C of her 2001 return, petitioner listed
“Professional Gambler” as her principal business and reported
negative income of $5,050 and $8,129 in expenses for a total loss
of $13,179. Petitioner kept records verifying the exact dates
2 There is no evidence in the record that, in her quest
to qualify as a professional gambler, petitioner inquired or
received any information that a basic and fundamental requisite
of a trade or business, including that of a professional gambler,
is that the activity be engaged in for profit.
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011