Ugh.  I just started collecting the paperwork for my taxes.  I do it every year myself using TurboTax because I like knowing what all the inputs are, and it helps me develop a better understanding of what drives the amount of taxes I pay.  I suppose in the "old days" when poker was played live, people probably didn't declare a lot of their income.  With many cash professions, whether you're a waiter, nail salon worker, cab driver, drug czar, or poker player, I would be shocked if more than a third of that income was declared.

But online poker is a new animal.  I withdraw from my poker account into my checking account (thru various means) several times a month.  Cash is not an option.  Currently, the IRS does not get any sort of documentation from the poker companies detailing my winnings.  This may change (as there is some pending legislation).  But in any event, I just save myself the headaches and declare all of my income for many reasons.  One, as a US citizen, that's what I'm supposed to do.  Two, if I ever get audited, I'm going to have to explain where all this money in my checking account is coming from.  Three, I can make my blog more entertaining and informative for you nice folks by talking about poker income.  Four, there are web sites that collect 90+% of hand histories so there are public estimates of player earnings.  Five, I'm not sure if any of the pending legislation will cause the poker companies to open up their books retroactively.  Six, I like not being in jail and spending time with my family instead.  Seven, my anus is a one way street and I do not want that violated by a cellmate.  I suppose at the end of the day, #7 is what it's all about.

Many countries do not require its citizens to pay taxes on poker winnings.  I hear countries like the UK, Italy, Sweden, Canada, Australia, New Zealand, Denmark, Portugal, Ireland, etc. have more lax tax regulations, where you *may* pay nothing depending on the circumstances.  Obviously the laws vary from country to country, so before you pack up your family and emigrate to save some money on taxes, do a little research.  Don't say "Doublefly sent me and he was wrong!"