A couple from Oneida have had better luck in U.S. Tax Court than in casinos.
Ronald R. and Traci A. Tomko can deduct $40,000 in slot machine losses from their 2001 income taxes even though they did not keep records in exactly the way the law requires, Judge Carleton Powell ruled in an opinion released Tuesday.
According to the decision, casinos reported to the government that the Tomkos had winnings of $44,464 from slot machines in 2001. Casinos are required to tell the Internal Revenue Service whenever a slot player wins more than $1,200 at a time.
Gamblers must also report such income on their returns but are allowed to deduct losses up to the same amount.
The Tomkos reported gambling income and losses of $21,100 on their 2001 return, which was audited.
During the audit, the Tomkos agreed they had winnings of $44,464 but claimed to have losses of a similar amount. However, they did not have a diary or other written record to prove the losses.
At trial in Tax Court last December, the Tomkos, acting as their own lawyers, submitted records of withdrawals from credit and debit cards totaling $46,542. They said that showed how much they gambled.
The Tomkos told Powell that they gambled until they used up all the money they had withdrawn except when they hit a payout of more than $1,200.
Powell said he was "bothered by this explanation" because although odds favor a casino, there can be times when a gambler wins. Still, given "the certainty that there must have been losses," he said the Tomkos could deduct $40,000.
As a result, they owe taxes on the rest of their winnings: $4,464. The amount of that tax bill could not be determined from the opinion.
The IRS is prohibited by law from discussing specific cases.
Traci Tomko declined to discuss the matter on Wednesday.
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