T.C. Memo. 2007-38
UNITED STATES TAX COURT
GEORGE E. AND GLORIA TSCHETSCHOT, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 9498-03. Filed February 20, 2007.
R disallowed losses in excess of Ps’ winnings from
gambling and determined both a deficiency and a penalty
for substantial understatement for 2000. After
conceding that H’s net gambling losses were not
properly deductible, Ps argued that, as a professional
tournament poker player, W’s net losses should be
treated the same as those of any other professional
sport participants.
Held: W’s net gambling losses are not exempt from
the limitations of sec. 165(d), I.R.C.
Held, further: We leave for the parties to
determine as part of their computations under Rule 155,
Tax Court Rules of Practice and Procedure, whether
there was a substantial understatement for the taxable
year in issue; if so, Ps are liable for the accuracy-
related penalty.
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