- 6 -
Respondent maintains that section 165(d) limits Mrs.
Tschetschot’s losses and that petitioners remain liable for an
accuracy-related penalty. Petitioners contend that Mrs.
Tschetschot’s professional tournament poker playing activity is
more properly classified as “entertainment and professional
sports” than professional gambling and should bear the resulting
tax treatment; i.e., that her net loss should not be limited by
section 165(d) restricting losses from wagering activities.
Petitioners also contend that they do not meet the threshold
amount for the imposition of an accuracy-related penalty based on
a substantial understatement of income tax.
OPINION
I. Tournament Poker5
Central to petitioners’ contention is the thesis that
tournament poker, unlike other types of poker, is not a wagering
activity.
The term “wagering” has different meanings depending on the
context in which the term is used. More often than not, and as
it is used in the Internal Revenue Code, the term is synonymous
with “gambling”.6
5 The issue related to tournament poker is essentially
legal in nature; accordingly, we decide it without regard to the
burden of proof.
6 The legislative history of sec. 23(g) of the Revenue Act
of 1934, ch. 277, tit. I, 48 Stat. 680, 689 (subsequently
(continued...)
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011