She played the slots, not cards, but Yelena Tolstov, T. C. Sum. Op. 2024-19, filed 9/23/24, is another story of gambling losses. STJ Peter (“HB”) Panuthos has this one, and it’s another sad tale of compulsion.

Yelena was an immigrant success story, until personal and business problems overwhelmed her. “Petitioner’s personal and business difficulties, compounded by the isolating circumstances of the pandemic, caused her to begin to gamble compulsively.” T. C. Sum. Op. 2024-19, at p. 2.

Yelena’s slotting led to massive losses, but her record keeping was confined to a casino statement showing a “coin-in” (money she placed on the plastic card she used in the casino’s slot machines) and ATM withdrawals. But better documentation eluded her efforts.

“We have previously considered evidence such as casino ATM receipts, bank statements, the taxpayer’s lifestyle, and the taxpayer’s overall financial position.” T. C. Sum. Op. 19, at pp. 4-5. (Citations omitted). Gambling losses can be approximated Cohan-style where the gambler has little income, no great accessions to wealth during the period at issue, and few assets, all of which fits Yelena’s case. And we all know that slot habitués have to lose.

But STJ Panuthos does even better than a Cohan inexactitude.

“The Court is satisfied on this record that petitioner undoubtedly incurred a loss at least equal to her winnings. The Court is also satisfied that petitioner was frustrated in good faith attempts to obtain substantiation from third parties. Petitioner is entitled to deduct $61,929 of gambling losses for the year in issue.” T. C. Sum. Op. 2024-19, at p. 5.

But her efforts and good faith can’t save Yelena from the Section 6662(a) accuracy chop.