“There is a law that says gambling losses wipe out gambling winnings “------>Gambling winnings are taxable on your tax return; you can deduct your gambling losses only to the extent of your gambling winnings.To deduct your gambling losses on your tax return, you must be able to provide receipts, tickets, statements or other records that show the amount of both your gambling winnings and gambling losses. You cannot deduct or carry forward a net gambling loss on your tax return; even if you are a professional gambler.
“but I found out that only applies up to $450,000. After that the gambling law does not apply and they tax you as if you actually had an income of $800,000. “---->You can deduct gambling losses only to the extent of gambling gain; the courts have ruled that this limitation applies even if the taxpayer is in the trade or business of gambling.If you gamble for your livelihood and are treated as being in the trade or business of gambling, you report winnings and losses on Schedule C, but can only claim losses to the extent of winnings. However, the activity as a whole cannot generate a loss for you. Any excess gambling losses over gambling winnings cannot be carried forward or carried back to offset gambling winnings from other tax years. These excesses are abandoned. The Tax Court has also ruled that the value of complimentary rooms, vacations, and other gifts a casino provides a taxpayer must be reported as taxable income but can be included in gambling gains and offset by allowable gambling losses. For the non professional gambler, the Tax Court has generally held that only the cost of a wagering transaction is treated as a gambling loss. Additional expenses to engage in wagering are not gambling losses. Thus, expenses for travel, meals, and lodging do not qualify as gambling losses. Unless yiu are a professional gambler, these additional expenses generally are treated as nondeductible, personal expenses because amateur gamblers do not have a bona fide expectation of profit, given how the odds are known to favor the house. Further, such expenses cannot be deducted as Section 183 hobby expenses because such travel expenses are typically considered personal, and the regulations thereunder do not provide an exception for hobby-related travel expenses. Adequate documentation is required to claim gambling losses. If you had a Player’s Club Card and used it while gambling at a Casino, you can request a Win/Loss statement. This statement summarizes all of your tracked gaming activity and provides you with a net win/loss figure. For any large jackpots that you might have won, you can receive a W-2G statement from the payee, which will provide you with the taxable jackpot figure/form to file with your year end taxes. Both of the above mentioned requests must be made in writing. If you do not have the above information, the IRS has stated that gamblers claiming losses must keep an accurate diary or similar record.
“My question is (finally) can they take my property and can they take the IRA and pension?”-----> Your IRA money may be at risk if you owe a debt collector money, depending on the circumstances;debt collectors may have the right to attach your IRA account to collect a debt depending on the laws of the state in which you live. Many states have laws that completely exempt an IRA account, protecting it from collections activity. Other states do not have these laws, and your IRA account may be subject to claims by your creditors. In some cases, your age is a factor, because many states have laws protecting retirement income. Your account may be protected If you are receiving distributions. The law allows the Internal Revenue Service (IRS) broad powers to collect the money that it is owed, especially when compared to other collection agencies. The same applies to an IRA account. The IRS is allowed to levy IRA accounts to collect your back taxes. The IRS collection manual gives specific guidelines to its agents. If a taxpayer has other assets that can be used to pay back taxes, those assets should be attached first. The IRS guidelines also state that if a taxpayer is not flagrant in his conduct, agents should not levy retirement accounts. Flagrant conduct includes tax evasion or fraudulent activity. If a taxpayer will soon need the money for living expenses, IRS agents are encouraged not to levy the account. An IRA is exempt for up to $1 million in a bankruptcy action, required distributions are not and may be taken by a bankruptcy trustee. In a Ch 7 bankruptcy is when a bankruptcy, a trustee takes all your nonexempt assets, sells or liquidates them and distributes the proceeds among your creditors. After this is done, the court issues a discharge of your debt, essentially forgiving it. The bankruptcy reform legislation passed in 2005 made it more difficult to discharge debts, but it allowed for more protection of IRA accounts. The first $1 million in IRA balances cannot be taken in a bankruptcy. The bankruptcy court can protect a higher amount, as well. If the IRA was created from rolled-over 401K accounts, the entire balance is protected in bankruptcy.
“Can they repeatedly take the Social Security even though on their own site it says it is exempt causing me to pay a fee each time they do it only to have it returned when I call them. Should I take the money out of the IRA?”------> Through the Federal Payment Levy Program, Social Security benefit payments outlined in Title II of the Social Security Act, Federal Old-Age, Survivors, and Disability Insurance Benefits, are subject to the 15-percent levy, to pay your delinquent tax debt. In most cases, Social Security income you receive for a disability cannot be garnished; however, an exception applies if you owe past due federal debts. Under the Taxpayer Relief Act of 1997, the IRS can garnish a percentage of your Social Security disability income, I guess 15% of your Soc Sec benefits, to pay back the amount you owe the federal government. If the IRS issues a levy against your Social Security income, the garnishment is continuous until your debt is paid or an alternate payment arrangement is made with the IRS. The IRS does not automatically take your Soc Sec immediately after you accrue a tax balance; you must have a tax problem that you do not address within a reasonable amount of time before the IRS takes this type of action. You have rights as a taxpayer regarding IRS collection procedure and the IRS must first notify you of the balance in writing and give you an opportunity to resolve the account.Beginning February 2011, the FPLP may exclude certain delinquent taxpayers who receive social security payments if their income falls at or below certain established levels. Before your Social Security benefits are included in the FPLP, IRS will send you a final notice of their intent to levy, with appeal rights, if one has not already been issued. If they don't hear from you, or if you have already received this notice, they will send you an additional notice explaining that your Social Security benefits may be levied.Then You have 30 days from the date of this notice to make arrangements to pay your tax debt before IRS begins deducting 15 percent from your monthly Soc Sec.benefit. Because the FPLP is used to satisfy tax debts, the IRS may levy your Social Security benefits regardless of the amount.
“ I read that Social Security can be sent to a friend or relative and they can pay your bills if you are unable to. Do you think that would be an option or can they still take that even if it is deposited in a relatives account. In the beginning I offered them money to resolve this which they turned down. I was working at the time. Now I am totally disabled and cannot offer anything.”----->No for the purposes of tax evasion(to be an act in which an individual intentionally chooses to not pay income taxes due or to avoid IRS tax levy); taxpayers who willfully avoid paying their share of tax are considered guilty of tax evasion. Tax evasion is the use of illegal schemes to illegally avoid paying tax. Tax evasion is punishable by penalties, interest, fines and imprisonment.The IRS places delinquent tax account information into a system that matches the SSN# of a delinquent tax account with federal payment information the taxpayer is scheduled to receive. Federal payments include government sources such as Social Security disability benefits, federal tax refunds and federal employee salaries. When a match exists, the IRS notifies you that you have one more chance to resolve the account before a garnishment is issued.As you owe taxes, the first thing you should do is file your missing returns and make sure the IRS has a valid mailing address on file for you. Since the notices you have a right to respond to (before receiving a garnishment) are sent by mail, you'll want to make sure they are deliverable. When you receive notice of your balance due, call the IRS to set up a payment arrangement. The IRS cannot take your Social Security income while you are on a payment plan. If you're on a fixed income and can't afford to make payments on your debt, call the IRS and request a financial hardship status. You'll have to provide proof of your income and expenses, but your Soc Sec income is safe when the IRS determines you have an inability to pay. Your Soc Sec income can only be garnished to pay federal debts. No other type of debt is subject to offset of your benefits. If a creditor threatens to take your Soc Sec income to pay a non-federal debt, they are in violation of section 207 of the Social Security Act. In addition, if a non-federal creditor garnishes your bank account, that creditor must return any funds that you can clearly identify as Soc Sec income. A federal tax lien or levy against you is almost impossible to lift once the IRS has taken action to collect a tax debt--especially if you haven't filed your income tax returns in several years
Please visit the IRS website here for more info;
The Taxpayer Advocate Service is Your Voice at the IRS! Contact a Local Taxpayer Advocate (LTA) in New York
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