In addition, his retirement account had decreased from $75,000 when he had retired in 2004 to $2,725 by the end of 2014, with most of the distributions being used for gambling.

Coleman's bank accounts did not reveal any increase in net worth during 2014 that was traceable to net gambling winnings, and his credit cards had closing balances totaling $28,243. During 2014, he made withdrawals totaling $240,113 while gambling at casinos. If he ran out of money while gambling, he would withdraw money from an on- site ATM, get a cash advance from the casino, or obtain an advance on a debit or credit card.

Coleman often withdrew cash from his bank account on the way to the casino. Because he had received the $150,000 insurance settlement, he gambled more during 2014 than he had been able to in other years. Two of the casinos tracked Coleman's wins and losses when he was using casino- issued rewards cards, but he did not always use these cards.Ĭoleman gambled extensively during 2014, predominantly at slot machines. Coleman gambled at four casinos during 2014, and he did not have complete records of his wins and losses for the year.Ĭasinos are required to issue a Form W- 2G for any slot machine jackpots of at least $1,200 but are not required to report smaller winnings or losses. Coleman also received nongambling income of $76,784 and a $150,000 nontaxable personal injury insurance settlement during 2014. Thus, the IRS prepared a substitute for return for him and issued a notice of deficiency. Although he had substantial earnings through the years as an insurance agent, he had been delinquent in paying multiple bills, including property taxes, because of his gambling habit.Ĭoleman did not file a tax return in 2014, despite having gambling winnings of $350,241 reported by casinos to the IRS on Forms W- 2G, Certain Gambling Winnings, for the year. The Tax Court found that a taxpayer sufficiently substantiated gambling losses of at least as much as his gambling winnings reported for the year.įacts: John Coleman was a compulsive gambler who admitted that his gambling had negatively impacted his finances and his family life.

Can casino winnings be claimed on taxes