I’m not referring only to Ronald Jamison; Mr J claims $12K in gambling losses for year at issue, saying he spent $40 per day, almost every day, rain or shine, on lottery tickets. But Mr J never signs a stip of facts or of issues; he doesn’t show for trial. And the lottery log proffered on the trial was prepared after exam commenced, and shows no winnings.
There is a W-2G showing $15K from something, although CSTJ Lewis (“That Sweet Name”) Carluzzo doesn’t say from what.
So Dr Tondelaya Gamble must carry the burden of Mr J’s proof of his losses in Tondelaya Gamble and Ronald Jamison, 2021 T. C. Sum. Op. 22, filed 7/28/21.
Dr Gamble has her own tax issues. While the deductions she claims from the Sub S she started fifteen (count ’em, fifteen) years before year at issue do consist of some legitimate business expenses, these are unreimbursed employee expenses from Dr Gamble’s hospital employment. The rest are personal nondeductibles.
Dr Gamble testifies that “(O)ther of petitioner’s family and professional obligations prevented her from operating [Sub S] in the manner originally intended. At trial she explained that during [years at issue] she was herself still being educated and trained in subspecialties that she intended to promote through [Sub S].” 2021 T. C. Sum. Op.22, at p. 3. No going concern, no deductions.
Remember Dr. Elizabeth A. Vitarbo, who had a similar problem? No? See my blogpost “Never Walked Alone,” 2/6/14. CSTJ Lew seems to get the doctors with Sub S issues.
But Mr J’s problem is the log.
“There are no winnings reported at all on the log, and given the extent of lottery ticket purchases shown on the log, we consider it highly unlikely that the only winnings enjoyed by petitioners were reported on the Form W-2G. The record does not reveal what, if any, substantiation petitioners provided to respondent during the examination to allow for at least a portion of the deduction.” 2021 T. C. Memo. 22, at p. 10. So Mr J only gets whatever IRS allowed.
Judge, I may be wrong, but I surmise you’re no gambler. Every gambler knows the State-run lotteries are a tax on stupidity. The odds are a joke. These lotteries are revenue-raisers for the States, and their takeout makes the tracks look like charities and the Indigenous Peoples’ casinos look like Santa Claus. If Mr J hit so much as $600 on one State lottery ticket, he’d certain sure get a W-2G so the State could nick him for income tax.
If he did even as well as the W-2G he got says, and was ahead for that year in the lottery, he should consider himself very lucky.
No real gambler buys lottery tickets.
Taishoff Law 
My guess is that Dr. Gamble’s gambling husband plays Illinois scratcher tickets. I didn’t realize until I found the Illinois lottery’s website that some of these cost up to $30 each. But since he claims his average daily spend was $40, let’s take a look at the $20 editions. One of these, the Lottery tells us, will produce a winner every 2.91 times. Not a jackpot, for sure. But there are prizes of $20 (at least you get your money back) on every 7.5 tickets; $25 on every 15 tickets; $30, $40 and $50 on every 30 tickets; and even $100 on every 52 tickets. No W-2G’s issued for any of those. So it was generous, but reasonable for IRS to allow a deduction for 47% of his investment – after all, we know the state keeps half.
The petition was filed in 2016 and the trial conducted in 2017. In January 2018, it was suggested that IRS might want to reopen the case to state its position on whether the Section 6662 penalty was correctly asserted. Whatever the parties had to say about that issue, was done by May 2018. Three years and one pandemic later – justice is served.
LikeLike
Mr Kamman, I’ll trust you on the IL State lottery format and numbers. It’s still a poor bet; the fifty percent take out, plus income tax (State, Federal, and municipal), is licensed larceny.
LikeLike