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Respondent determined a deficiency of $9,934 in petitioners’
2001 Federal income tax. The issues are whether petitioner
Thomas L. Pias (petitioner) was in a trade or business of
gambling and whether the parties had previously settled the case.
Petitioners resided in Racine, Wisconsin, when the petition in
this case was filed.
Background
The facts may be summarized as follows. After 28 years,
petitioner retired as an accountant with a local automobile
distributorship in January 2001. Prior to that time, he had
gambled occasionally at casinos. In August 2000, petitioner
received the following written advice from the local office of
the Internal Revenue Service:
A gambler is engaged in a trade or business [of being a]
“professional gambler” when the gambling activity (1) is
pursued full time, in good faith, and with regularity, to
the production of income for a livelihood, and (2) is not a
mere hobby; resolution of this issue requires an examination
of the facts in each case.
Commissioner of Internal Revenue v. Groetzinger
No. 85-1226
Supreme Court of The United States
Subsequent to his retirement, petitioner began going to
casinos 2 or 3 times a week. This shift in his behavior was
prompted by what petitioner thought was a “lucky streak.” His
gambling consisted of playing video poker machines. Petitioner
returned to work in September 2001.
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