Lawyer and High Stakes Poker Player Tom Goldstein Indicted for Tax Fraud
Tom Goldstein, a high profile attorney, is also a long time high-stakes poker player. On January 16th, he was indicted for tax evasion related to a failure to adequately report gambling winnings. The indictment details a number of ultra high stakes games in Asia, Dallas and Beverly Hills as well as Goldstein's coaching by two unnamed professional poker players.
wait so the government is just freerolling on gambling winnings?
that is really ****ed up
You can only write off gambling losses up to your wins for the calendar year in the US. You can't write off losses prior years even if you file as a pro.
For this reason tournaments really are tax nightmares.
A federal judge in 2012 ruled that poker is not gambling. Tom Goldstein was the attorney in that case.
I have my doubts about whether this is as clear cut and simple as you think. But I'm biased. I tend to think of a lot of prosecutors as agenda-driven low IQ types who lack a moral compass, prone to making dogmatic pronouncements rather than thinking with nuance.
In any case, he entered a plea of not guilty. Let's let the facts and arguments speak for themselves as gambling is not a well-defined aspect of the tax code.
I am confident about how the tax laws work for reporting gambling activity. I have no idea how Mr. Goldstein is going to do in his defense. Not sure why you think prosecutors are low IQ. I am sure the average prosecutor has an IQ well within the top 20% of the population as a whole. Based upon this and other posts, it seems you have a strong bias against prosecutors. But that doesn't mean they are idiots.
In 2012 a federal judge ruled that poker is not gambling. The defendant's counsel was Tom Goldstein.
The judge wrote "studies have found that skilled players defeated unskilled players both in simulations and in real-world play."
Oh cool, so Jerry Yang was indeed the greatest poker player in the world in 2007!
I am confident about how the tax laws work for reporting gambling activity. I have no idea how Mr. Goldstein is going to do in his defense. Not sure why you think prosecutors are low IQ. I am sure the average prosecutor has an IQ well within the top 20% of the population as a whole. Based upon this and other posts, it seems you have a strong bias against prosecutors. But that doesn't mean they are idiots.
You are stating "how the tax laws work" in a pragmatic way. But that doesn't mean there aren't significant ambiguities about how they ought to work, the relationship between poker and gambling, and deferring to jurisdictions, all of which need to be sorted. I cited the a federal judges ruling that poker was not gambling, but that it was a game of skill vs. chance? Surely you don't disagree with that decision?
I realize you have a background in poker and law, which is why I'm surprised your thinking isn't more fecund around the ambiguities involved. I am very aware of your argument and why you're saying it, and that you believe it's cut and dry. But if things were so simple then there would be little need for lawyers and accountants who argue about ancillary issues. There's a whole canon of writs and armies to boot demonstrating that law and accounting are subject to interpretation.
To the last point. Perhaps, and agreed it's not germane to the merits of the case. I would only highlight the expected 13 point LSAT DEI bonus for GW and that it would put the prosecutor at a 151-155 LSAT score. I think that demonstrates mediocre aptitude, but we can agree to disagree. And even if I were correct, that he's of mediocre intelligence and unable to hold multiple complexities in abeyance, he can still craft a winning case.
I say let's see how this plays out rather than rush to judgment based on a one-sided document. Goldstein seems to have some demons but he is crafty and creative. I'm hopeful that poker be treated more similarly to other forms of income, with their benefits, rather than this halfway mixture between pure gambling and other vocations. I would hope you would want the same level of transparency and equality.
You are stating "how the tax laws work" in a pragmatic way. But that doesn't mean there aren't significant ambiguities about how they ought to work, the relationship between poker and gambling, and deferring to jurisdictions, all of which need to be sorted. I cited the a federal judges ruling that poker was not gambling, but that it was a game of skill vs. chance? Surely you don't disagree with that decision?
I realize you have a background in poker and law, which is why I'm surprised your think
Normally I just lurk on this website, but this post completely misses the point with respect to the indictment Tom Goldstein is facing I had to post something. It is obvious to me you have not read the indictment. In the way of background I was a dealer in Las Vegas in the 1980's then I finished college at UNLV and went off to law school. I practiced criminal law in South Florida for over 25 years. I was not a big shot I always described myself as a trench soldier or grinder. I am retired from active practice, and I deal poker tournaments about 15 weeks a year because I enjoy it and it gives me something to do.
This indictment does not deal with accounting methods or anything of that nature. If you read the indictment, you would see that it deals with fraud, money laundering and things of that nature. The indictment is 50 pages long and is very detailed and specific with respect to the statutes (laws) Goldstein is alleged to have violated. (I am attaching a link to the indictment at the bottom of this post.) There is no ambiguity in the indictment.
A few other points that you should consider with respect to your analysis, or lack thereof, of the indictment.:
First, the Government (US Attorney's office) knows that they are up against an elite lawyer and this indictment has been reviewed very thoroughly, by a number of lawyers, before being filed. Second, that the Government already has, in its possession, all of the evidence required to prove each and every count to the indictment. This would include all of the tax returns the Government claims are false or fraudulent, all of the text messages and emails pertaining to the case, statements of other witnesses and maybe even cooperating witnesses who flipped in order to mitigate their own cases. This indictment was only filed after a long investigation.
Your discussion of LSAT scores and things of that nature is a joke and demonstrates that you do not understand the different skill sets involved in different areas of the law. During my first year law school I became friends with a guy who described his father as just a plain ole country lawyer. His office was in a county that had only two red lights in the entire county. While he was in law school he was on academic warning or probation his entire 2nd and 3rd year. In other words, he barely graduated from law school. Hel went on to become one of the most highly regarded trial lawyers in the State of Georgia. His exploits in the courtroom were legendary. Based on your post this guy would be an idiot.
Rest assured that the US Attorney's office put some of their best prosecutors on this case. Based on my experience in criminal law there is a substantial likelihood that Mr. Goldstein will suffer a conviction, probably by way of a plea, and goes to prison for a while. The only "X" factor to me would be whether he provides substantial assistance in other cases which would reduce his exposure in this case. For those who would rather pass on reading the 50 pages of the indictment Doug Polk has an excellent take, video, on this matter that I accessed on the Poker News website.
You are stating "how the tax laws work" in a pragmatic way. But that doesn't mean there aren't significant ambiguities about how they ought to work, the relationship between poker and gambling, and deferring to jurisdictions, all of which need to be sorted. I cited the a federal judges ruling that poker was not gambling, but that it was a game of skill vs. chance? Surely you don't disagree with that decision?
.... I would hope you would want the same level of transparency and equality.
Hello,
Would you have an actual citation to this ruling you mention ?
I'd like to see that federal court decision you talk about. You have a citation ?
At a minimum, what was the federal court , the name of the "poker party" and where and when this ruling was made ?
Was the order/ruling appealed by the other side ?
Asking in order to see if what you reference is "good law".
Thanks, one never knows when some favorable precedent could be helpful
Normally I just lurk on this website, but this post completely misses the point with respect to the indictment Tom Goldstein is facing I had to post something. It is obvious to me you have not read the indictment. In the way of background I was a dealer in Las Vegas in the 1980's then I finished college at UNLV and went off to law school. I practiced criminal law in South Florida for over 25 years. I was not a big shot I always described myself as a trench soldier or grinder. I am retired from
Sorry that I struck a nerve on the correlation between LSAT scores and aptitude. You're right, there are exceptions but we call those... exceptions. And exceptions are merely exceptions.
Hello,
Would you have an actual citation to this ruling you mention ?
I'd like to see that federal court decision you talk about. You have a citation ?
At a minimum, what was the federal court , the name of the "poker party" and where and when this ruling was made ?
Was the order/ruling appealed by the other side ?
Asking in order to see if what you reference is "good law".
Thanks, one never knows when some favorable precedent could be helpful
Here's an article, you can fish for the court case more if you'd like and draw your own conclusions.
Normally I just lurk on this website, but this post completely misses the point with respect to the indictment Tom Goldstein is facing I had to post something. It is obvious to me you have not read the indictment. In the way of background I was a dealer in Las Vegas in the 1980's then I finished college at UNLV and went off to law school. I practiced criminal law in South Florida for over 25 years. I was not a big shot I always described myself as a trench soldier or grinder. I am retired from
Then you of all people should know what a straw man argument is. I was bringing up the fact that tax fraud and accounting are complicated issues to others on this post as it relates to poker and gambling in general.
Poor presuppositions lead to poor conclusions.
Thank you for your service as a dealer.
That they did not do actual work. They have to do legit work and for a rational wage. I can’t “hire” you to come in one time for 10 min, make a pot of coffee and then pay you a $15k salary.
They were hired by his company and paid by the company. I presume he wrote off their pay as wages expense. So the company must get business related services in exchange for wages. And there needs to be a rational basis for the wages paid.
If he personally wanted to employ and pay them, then
Is this actually true? You’ve just asserted this, but haven’t cited any laws. Like, why is the actual crime here? Where does it say you can’t be paid $15k for 10 minutes of work. There’s no “maximum wage” law in the US (or “rational wage” as you’ve stated it).
If you hire someone to clean your house, you can’t write it off as a business expense because that would be tax evasion. But it’s the write-off that illegal, not the hiring. I see no claim here that Goldstein avoided taxes by paying these women.
Edit: I think I see what you’re saying after reading more carefully and trying to search for this myself; the illegal part here would be deducting this wage from the corporation’s profit’s to reduce corporate tax liability I suppose? It does sound like this could be illegal. I didn’t see this specific allegation in the indictment, but maybe I just didn’t read it closely enough.
Then you of all people should know what a straw man argument is. I was bringing up the fact that tax fraud and accounting are complicated issues to others on this post as it relates to poker and gambling in general.
Poor presuppositions lead to poor conclusions.
Thank you for your service as a dealer.
.
Like I stated in my prior post it is obvious you have not read the indictment. This thread is about the Tom Goldstein indictment not whether or tax fraud and accounting issues are complicated or not. If you were to take the time to read the indictment you would see that most of the questions you and others raise in this thread are answered within the indictment.
You write " Poor presuppositions lead to poor conclusions". How can you make a conclusion, or even render an opinion, about a case that you have never read?
Your swipes at me demonstrate your lack of maturity, most of the people on this board can argue above a middle school level. If, after carefully reading the indictment, you think Mr. Goldstein can beat this case then tell us why.
Do lawyers hire other lawyers to defend them in cases? How does the lawyer representing the other lawyer have one then? Is there just an unlimited amount of lawyers defending other lawyers?
The short answer to your question is Yes there are lawyers who specialize in representing other lawyers when they get into trouble. This would include when lawyers get arrested, when lawyers get sued for things like legal malpractice, when they face investigations with a state or federal agency and when they get in trouble with the Bar. Obviously, anytime a lawyer gets arrested they will have issues with the Bar. If they get convicted of a serious crime they face suspension or disbarment.
Is this actually true? You’ve just asserted this, but haven’t cited any laws. Like, why is the actual crime here? Where does it say you can’t be paid $15k for 10 minutes of work. There’s no “maximum wage” law in the US (or “rational wage” as you’ve stated it).
If you hire someone to clean your house, you can’t write it off as a business expense because that would be tax evasion. But it’s the write-off that illegal, not the hiring. I see no claim here that Goldstein avoided taxes by paying these w
You are correct there is no max wage. You can pay as much as you want but when you write off the excessive (not rational) wage you have committed fraud. This is not “could be illegal”, it is. Indictment says they were paid as employees @nd the company used a professional tax service. I feel safe in assuming that professional service is deducting wages as a business expense. Thus would be among the tax fraud charges.
fyp
don't do the entire link
instead of this https://www.youtube.com/watch?v=n_UbFjUl...
use just this: n_UbFjUlWnI
.
Like I stated in my prior post it is obvious you have not read the indictment. This thread is about the Tom Goldstein indictment not whether or tax fraud and accounting issues are complicated or not. If you were to take the time to read the indictment you would see that most of the questions you and others raise in this thread are answered within the indictment.
You write " Poor presuppositions lead to poor conclusions". How can you make a conclusion, or even render an opinion, about a case t
Pot calling kettle. I might add that the irony is rich in that you are also being discursive.
I think you get flustered far too easily. Toughen up.
You are stating "how the tax laws work" in a pragmatic way. But that doesn't mean there aren't significant ambiguities about how they ought to work, the relationship between poker and gambling, and deferring to jurisdictions, all of which need to be sorted. I cited the a federal judges ruling that poker was not gambling, but that it was a game of skill vs. chance? Surely you don't disagree with that decision?
I realize you have a background in poker and law, which is why I'm surprised your think
You keep dancing around and adding in other distractions. The manner in which the IRS expects you to report gambling wins/losses is extremely well established, and has been for decades. Are the underlying laws complex? Yes. Could you argue that this long-standing interpretation of how gambling activity is to be reported is incorrect, and based upon these underlying laws it should be changed? Yes. But until you or somebody else argues that lawsuit and wins, the proper methods are what they are. You can talk about fecund ambiguities all you wish, but either file and win that lawsuit, or do it they way they have established. I will stop responding going forward, because it is clear you just like to argue nonstop, and don't care about the subject matter you are discussing. You are just a (polite and eloquent) troll, or at least that is all I see here.
You keep dancing around and adding in other distractions. The manner in which the IRS expects you to report gambling wins/losses is extremely well established, and has been for decades. Are the underlying laws complex Yes. Could you argue that this long-standing interpretation of how gambling activity is to be reported is incorrect, and based upon these underlying laws it should be changed Yes. But until you or somebody else argues that lawsuit and wins, the proper methods are what they ar
Indeed you are correct. But why are you ignoring the ruling from 2012?
Sometimes it's more fun to speak with double entendre, that is to say with irony and facetiousness. Why? One can communicate differently to different audiences simultaneously and allow others to announce their own lack of intellect and curiosity. Less intelligent types will invariably over-literalize and make judgments precisely correlated to their horizon of knowledge and you can then figure out who you're dealing with. Quickly.
An analogy at the poker table. Explaining your logic of reverse implied odds after a hand, especially without brevity. Small-minded grinders will see a target and those with a lightbulb are ultimately less straightforward in their play.
At the end of the day I'm less than enamored by prosecutors. Perhaps I'm disappointed by law fare and blatant lies about valuation as of late.
One should not assume that government functionaries are virtuous and don't play political games on the taxpayers back. There might be more than meets the eye regarding Goldstein's prior success in court, and to that, you are welcome to exercise your curiosity.
Indeed you are correct. But why are you ignoring the ruling from 2012?
Sometimes it's more fun to speak with double entendre, that is to say with irony and facetiousness. Why? One can communicate differently to different audiences simultaneously and allow others to announce their own lack of intellect and curiosity. Less intelligent types will invariably over-literalize and make judgments precisely correlated to their horizon of knowledge and you can then figure out who you're dealing with. Quic
No real need to debate the 2012 ruling. AFAIK (but have not researched) it was never appealed by DOJ. If not it solely is binding precedent on that judge and for that statute (which was not an IRS filing law).
Thus it has no direct or specific bearing on this case in a different court in a different district where he was indicted under different laws. He was not accused of illegal gambling which charge and decision in the 2012 case.
Goldstein was indicted on tax fraud for (amoung other things) not reporting all (or any?) of his poker income. Whether poker is gambling or skill doesn't matter. The law is ALL INCOME must be reported. He did not (at least per indictment, he may if he chooses have a chance to show he did) report all his income. That it was income from poker wins simply doesn't matter if it was not reported. This has been discussed at the time here on 2+2... https://forumserver.twoplustwo.com/57/ge...
I am not sure why you wish to question GR. We know he is a lawyer (no longer practicing I understand) and though his specialty was patent law, he was active in the PPA who filed a brief in this very case (though if he was active at that time I do not know.) He has worked to get poker recognized as a game of skill. So I suspect he knows your arguments better than you do.
But again, this indictment is not about gambling laws. It is about IRS filing laws. Regardless of whether Goldstein filed as a pro or a rec, he must report all of his income regardless of the source.
No real need to debate the 2012 ruling. AFAIK (but have not researched) it was never appealed by DOJ. If not it solely is binding precedent on that judge and for that statute (which was not an IRS filing law).
Thus it has no direct or specific bearing on this case in a different court in a different district where he was indicted under different laws. He was not accused of illegal gambling which charge and decision in the 2012 case.
Goldstein was indicted on tax fraud for (amoung other things) not
Income is reported on an annual basis. Gas stations, insurance salesmen on commission, the w-2 guy, etc... file their end of the year income. You keep insisting that each poker win/session or whatever is individually reported and then they file for deductions. 1) This assumes poker = gambling and 2) poor filing constitutes tax fraud.
It remains to be seen if there was actually any unreported income. I would not be surprised if he had a net loss and therefore no income as a poker player. There's no way you have knowledge of that either. Absent data, I would suspend judgment, which I know, isn't de jour.
If you think those texts with big individual wins equals income, so be it, and we can disagree on tax law interpretation. I think you're being tautological and you think I'm pretending to be clever. Whatever.
Income is reported on an annual basis. Gas stations, insurance salesmen on commission, the w-2 guy, etc... file their end of the year income. You keep insisting that each poker win/session or whatever is individually reported and then they file for deductions. 1) This assumes poker = gambling and 2) poor filing constitutes tax fraud.
It remains to be seen if there was actually any unreported income. I would not be surprised if he had a net loss and therefore no income as a poker player. There's
Not my claim. It is the IRS's claim and they have plenty of case law backing up that all income must be reported. This includes gambling income of which poker is included.
The IRS further describes how gambling income (recall, poker was included under gambling income) must be reported depending on if you are professional or not.
But Goldstein, at least per indictment, definitely did not file as a professional gambler. Thus his gambling income must be included as misc. income. Any losses must be entered as itemized deductions (and they are limited to no more than the gambling winnings).
For tournaments, this is specifically discussed in W-2G and 5754 instructions. But it is also discussed in the 1040 instrutions and specifically on Schedule 1.
Now if you want to contend that cash game poker is not gambling. Fine. The first thing that means is you cannot file as a professional gambler w.r.t. your poker winnings.
Now we revert to 1040 instructions outside of Sched C (where a pro gambler files). On the 1040 all taxable income must be reported. Unless you can find an exemption for poker income, all poker income must be reported.
There is no guidance, rule, law or regulation that let's you deduct losses or expenses from this income on the 1040 sans Sched C (which is were you can deduct expenses, but you can't file a Sched C because you decided that this is not professional gambling.).
Where you can deduct expenses or losses would be a itemized deductions. But those are entered below the AGI line and thus not netted.
And we have not even discussed UIGEA section 5132. This was included such that UIGEA would include things like online poker would be covered. This was how federal gov't s/d online poker. AFAIK, unless you can provide a proper cite, this has never been overturned.
We can also look to when PAPSA being overturned. It was this which subsequently allowed not only online sports betting but intrastate (and compact) online poker.
Even the 2012 ruling you reference does not say poker is purely skill based. It acknowledges there is chance also. Per the 5132 ref. above a game involving chance (doesn't say exclusively chance) is gambling.
So unless you can start providing on point rulings at the SCOTUS level (as that is where PAPSA was overturned) showing poker is a business but not gambling, you can't get to any form of netting income and losses.
BTW, the only listing for poker as a industry under the NAICS from Census Bureau is 713290 Other Gambling Industries. Just more indication that the US gov't currently positions Poker as gambling even though it involves skill.
But feel free to file your taxes your way. And not report all poker winnings as income. If you are ever audited, let us know how that plays out. Or you can wait and see what happens in this case. Feel free to come back and gloat is your unsupported positions win out.
You realize I understand you, right? I just think you're equivocal.
But Goldstein, at least per indictment, definitely did not file as a professional gambler. Thus his gambling income must be included as misc. income. Any losses must be entered as itemized deductions (and they are limited to no more than the gambling winnings).
when you say deductions no more than the gambling winnings, is it the winnings from the previous years?
and say you file as a pro is it also limited as no more than gambling winnings?
