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Respondent determined a $4,190 deficiency in petitioners’
Federal income tax for 2004 and an $838 accuracy-related penalty
under section 6662 due to negligence.
The issues for decision are whether petitioners are entitled
to net their gambling losses against their gambling winnings in
computing adjusted gross income and whether they are liable for a
section 6662(a) accuracy-related penalty due to negligence.
Background
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated by this reference. Petitioners resided in
Williamstown, New Jersey, at the time they filed their petition.
During 2004, petitioner Thomas Dawson was employed full time
as a building inspector, and petitioner Christine Dawson was
employed full time as a registered nurse.
During 2004, petitioners gambled at casinos in Atlantic
City, New Jersey. Most of petitioners’ gambling consisted of
playing $5- or $10-pull slot machines. Neither petitioner was a
professional gambler. Their combined jackpots received from
Atlantic City casinos in 2004 totaled $208,420; however, their
combined gambling losses for 2004 exceeded the $208,420 jackpots
that they won. In other words, petitioners’ gambling activities
during 2004 resulted in a net loss.
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Last modified: March 27, 2008