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Man Faces Five Years in Prison for Failing to Declare Taxes on $1M Poker Winnings

Tags: Connecticut, Guy Smith, Seminole Hard Rock Poker Open, tax.
Posted on 30 December 2020 by "T".

A small business owner and poker player in Connecticut has pleaded guilty to one count of tax evasion. The man faces a maximum jail time of up to five years.

Guy Smith, age 62, of Shelton, Connecticut has waived his right to be indicted earlier this December. He pled guilty instead to tax evasion on his business income and winnings from poker. According to the United States Attorney's Office for the District of Connecticut, Smith owns Centerline Interiors LLC, a commercial interior construction business, but his main income came from playing in poker tournaments within the country.

Smith withdrew funds from his business and personal bank accounts to fund his poker bankroll, authorities said.

A release from the Department of Justice stated, "Even though the IRS notified Smith on multiple occasions that he was required to report all of his gambling income on his federal tax returns, Smith concealed his gambling income from his tax preparer and paid no income taxes on more than $1 million in gambling winnings."

Federal officials said Smith failed to declare and pay a combined total of $821,415 in federal income taxes for the tax years 2012 to 2016.

Smith has been released on a $50,000 bond pending sentencing which is scheduled on March 4, 2021. He faces up to five years in prison. He agreed to cooperate with the IRS and pay all outstanding taxes, plus interest and penalties.

Taxes on Poker Wins

Based on The Hendon Mob poker database, the best cash that Guy Smith had was back in July 2016 at Foxwoods.

Smith won 1st place in the $1,000+$100 NLHE Championship Summer Kickoff, outlasting 216 players. He took home $51,149. A month after that, he won his second-best cash, getting 5th place at the $1,100 NLHE Re-Entry at the Seminole Hard Rock Poker Open in Hollywood Florida for $37,800.

Winnings from any gambling activity, poker included, are considered taxable income and should be reported, and the IRS said Smith failed to do so.

Personal finance outlet Kiplinger explained, "Whether it's $5 or $5,000, from an office pool or from a casino, all gambling winnings must be reported on your tax return as ‘other income' on Schedule 1 (Form 1040)."

He should be very well aware of his tax liabilities for his poker wins. Casinos give away IRS Form W-2G to poker players who win over $5,000 in a tournament. Gamblers receive the tax form either on the spot or via mail.

IRS Audit

Tax professionals say there are certain red flags that make an individual's tax filing most likely to receive an audit than others.

Kiplinger says, "If you receive a W-2G form along with your gambling winnings, don't forget that the IRS is getting a copy of the form, too. So, the IRS is expecting you to claim those winnings on your tax return. If you don't, the tax man isn't going to be happy about it."

Kiplinger also says that certain gambling losses can be listed on Schedule A up to the amount of one's winnings, but if you claim more gambling losses than winnings, "It's a slam dunk for IRS auditors."


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38 comments on "Man Faces Five Years in Prison for Failing to Declare Taxes on $1M Poker Winnings"

Displaying only the 25 latest comments. To view all comments, please visit the forum thread:
» Man Faces Five Years in Prison for Failing to Declare Taxes on $1M Poker Winnings

 dule-vu03/01/2021 14:06:56 GMT
in usa first thing is to pay tax and then its everything else and thats how this country work for decades!first thing that they ask you and care for is to pay tax for everything and then you will get your rights!thats why is strange that somebody who is old like this man,didnt want to answer to them,even they contacted him!
 sirkosun03/01/2021 17:58:09 GMT
This is interesting news. The topic of taxing winnings in poker, lotteries or casinos is little discussed.
For example, I do not know what is the percentage of tax on online winnings.
Unfortunately, I do not have such problems because I will not win anything.
 geseco1204/01/2021 03:03:45 GMT
Taxes in the United States are mandatory, they must always pay, but sometimes we don't, and sooner or later the authorities will find out and you will pay with jail, sometimes it becomes more difficult for us when you do not declare several years, that It accumulates and in the end it is difficult to pay for it in one person, which serves as an example to avoid making mistakes.
 CALICUL04/01/2021 12:55:23 GMT
It is not at all easy in USA to pay taxes, when you have a poorly paid job. Many people were left without their personal homes, when banks or state confiscated them. Others have money but are stingy to pay all taxes. The risk is on their skin.
 geseco1205/01/2021 03:26:30 GMT
That is why the United States has very high tax rates, because they exploit poor people, we must take that into account, because it is abusive, but what is going to be done, that is why it is a world power, many income, but if people know of those norms, because he gets to hide and not pay his taxes, jail is hard in addition to being fined, they should think a little more, the state is not going to be fooled, hopefully this problem will be solved.
 antonis32107/01/2021 09:21:57 GMT
Really idiotic

Idiotic on behalf of him not to inform IRS for his poker winning and declare taxes on these winnings .
If US IRS is so connected with everything and they are getting the info on the gambling winnings of US citizens , why try to hide it ??
You have nothing to win , only to lose , lose money on extra taxes and fines and interests , lose time with this case , gamble with the possibility to be convicted to jail time , even with suspension due to paying fines and taxes and cooperation with the authorities after being caught up etc etc .
Also now he is on the black list , he will be checked every now and then for any inaccuracies in his tax reports , they will be waiting to impose him greates fines , and ofcourse the suspendes jailtime if he gets one indeed .

So why did he tried to hide the $1M ?? i mean , if he lived in a banania country like Greece ( Big Smile) , i would understand him completely , here they are ALL thieves , but in USA man ?? And he is not a wealthy man , a big fish , so he will be crucified as an example for the rest .

Really idiotic
 magatt96607/01/2021 10:02:42 GMT
Luckily I haven't this kind of problems Big Smile Big Smile
 dule-vu07/01/2021 19:28:59 GMT
we all know that paying taxes and decision which court make,are two things that are 100 % sure in usa and that you know that they will get you!you need to pay tax and in example of phile ivey,when borgata wanted money from him,this was sure that he need to pay,but borgata let it down,because they knewt that they will not get this money from him!
so this man should know how things work in america!
 CALICUL07/01/2021 21:34:28 GMT
The only thing we need to know in the USA is that all persons must to pay taxes ( except for sovereigns, other privileged people such as reservation Indians or others ). We cannot be forgiven by the law if we are wrong. If we have Alzheimer or other illness it is possible of course but must pay these taxes without process.
 geseco1213/01/2021 15:50:51 GMT
That country like the United States pays too much taxes, that's why most people sometimes don't pay taxes because it is a lot in their opinion, but that's the way the law is, sometimes we try to hide that, but in the long run the state will always win for that We must not cheat because now are the consequences, become aware of that.
 CALICUL14/01/2021 10:38:14 GMT
The taxes were too high in America, but i can't make a comparison between democrats and republicans, because i don't know that amounts stopped by tax authorities... with some or with others, when they were in charge. We see the war there and what it will be.
 Rogerio1015/01/2021 09:06:31 GMT
How big are taxes on poker winnings in USA? Don't know if i mised somethin but i cant find that in article. Anyway you must accept the consequences for what you do in past. It's probably not that he like didn't know that he must pay taxes, right? There are allot of better countries if you want to play poker profesionaly.
 dule-vu15/01/2021 10:21:04 GMT
no matter how much you earn,you pay tax on everything!we all know how sports players pay arround 50 % or their salary on tax (depend of state),so when they say on tv that some basketball player will get 20 million dollars for one year,he will get 10 million,because nobody say that is with tax!so everything else as playing poker and other things are same,you will pay it on end!
 CALICUL15/01/2021 11:10:43 GMT
In every year thousands of students around the world visit United States with Travel program or something like that. They hoping for experience with American way of life. Of course, if you work in America, you will also must to pay tax. People are robbed in many countries but ''this is it''...
 dule-vu16/01/2021 10:32:24 GMT
its not strange that people pay big taxes on salaries or something that they win,get or on luxury!we have other countries like usa,for example denmark!in denmark you have taxes on your salary and I think its more then 50 % and nobody say anything wrong,because they still earn lot of money and they are happy!
in usa normal worker maybe dont have so much money,so thats why he avoid to pay tax on any way!
 CALICUL16/01/2021 12:00:58 GMT
America has always been a corrupt country. This is the truth since 1492 or more. Many crimes, robberies, rapes, protection fees, bribes, tax fraud or others ugly things. Illegalities are in every day here. We should not be surprised.
 kartax1216/01/2021 13:47:56 GMT
Unfortunately, sooner or later taxes adjust you so you have to be careful, a good accountant is never too much.
 dule-vu17/01/2021 11:38:26 GMT
we talk about normal tax that every man pay in america,not aboout criminal and did somebody shot other person!
when you start working,when you gamble or whatever you do,you know before how much tax go on something like this,so you cant be suprised after that!we dont have such a big taxes as they or we dont have at all,like in my country (on online gambling,poker,casino),so we have luck in that!
 CALICUL17/01/2021 12:42:47 GMT
The point is, there have always been people who fooled the tax authorities in united states of america. This has been happening for centuries and people even resorted to murder to get rid of taxes. Few countries can boast decent fairness without great illegalities.
 geseco1219/01/2021 20:06:08 GMT
The state cannot be fooled, I think that their mistake is knowing that they will not realize it, well we know that sooner or later things will be known and even in a country like the United States, that everything is attentive to fraud, well I also know Know that the United States has the highest tax rate, that makes many do not want to give for the amount they mean, and this is worse when you have not paid your taxes for many years, that has become very large that it is difficult to pay.
 CALICUL21/01/2021 19:31:10 GMT
Any country from the world can be fooled and USA is one of leaders with tax fraud. There is always evidence but many of them escape, Until they take the cash out of the market nothing will change. Corrupt people in system falsify documents and escape without being caught...
 CALICUL18/08/2021 21:47:33 GMT
this model should not be followed by many people, because we have a good chance of being caught and after that will lose more than we hope to gain through this tax evasion. Normalcy is best where we can be caught. When the chances are high to escape then we can commit fraud.
 CALICUL15/09/2021 10:59:08 GMT
people will make tax evasions or all sorts of other scams because a crisis like Covid 19, an economic one or any other kind, can make people to avoid paying the tax and then they risk their own freedom. This is the situation and everyone proceeds as he wants to be, legally or illegally.
 CALICUL20/10/2021 14:16:40 GMT
the problem of taxes is obviously an oppression for many people because they are too high. The government does not work but knows how to ask for a lot of money from the work and people's minds. A lot of lazy people who make money from everyone, instead don't do a good job when people ask for help.
 CALICUL10/11/2021 19:52:22 GMT
in the few years that technology has exploded, people can no longer make tax evasion so easy. They were caught and forced to pay. Others went to jail. Cheating is much easier to catch. However, people are living in a dictatorship now, that will intensify, and illegalities will disappear.

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