Coleman also received nongambling income of $76,784 and a $150,000 nontaxable personal injury insurance settlement during 2014. Thus, the IRS prepared a substitute for return for him and issued a notice of deficiency. Although he had substantial earnings through the years as an insurance agent, he had been delinquent in paying multiple bills, including property taxes, because of his gambling habit.Ĭoleman did not file a tax return in 2014, despite having gambling winnings of $350,241 reported by casinos to the IRS on Forms W- 2G, Certain Gambling Winnings, for the year. The Tax Court found that a taxpayer sufficiently substantiated gambling losses of at least as much as his gambling winnings reported for the year.įacts: John Coleman was a compulsive gambler who admitted that his gambling had negatively impacted his finances and his family life.
