- 14 -
substantial understatement of income tax. We therefore leave for
the parties to determine as part of the Rule 155 computation
whether there was, in fact, a substantial understatement for the
taxable year in issue. If a substantial understatement exists
for the year in issue, petitioners are liable for the accuracy-
related penalty.
III. Conclusion
The moral climate surrounding gambling has changed since the
tax provisions concerning wagering were enacted many years ago.
Not only has tournament poker become a nationally televised
event, but casinos or lotteries can be found in many States.
Further, the ability for the Internal Revenue Service to
accurately track money being lost and won has improved, and some
of the substantiation concerns, particularly for professionals,
no longer exist. That said, the Tax Court is not free to rewrite
the Internal Revenue Code and regulations. We are bound by the
law as it currently exists, and we are without the ability to
speculate on what it should be. Accordingly, we hold that
tournament poker is a wagering activity subject to the
limitations of section 165(d).
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