Hallelujah, gamblers in the business of gambling may now deduct business expenses in excess of gambling losses. The Tax Court, in a new, precedent-setting case, establishes new rules for gamblers in the business of gambling.

Anti-alienation provisions prevent ordinary creditors from levying pension payments. The IRS does not suffer these provisions.

Gambling requires good strategies not only in your gambling activity, but also for tax purposes. You need to report your gambling income and losses in your tax returns and keep tax records whether you win or lose, whether the gambling is legal or illegal, and whether the gambling is a tax defined business or hobby.

Hobby gambling can trigger taxes when you have a zero income because the law makes your winnings reportable above-the-line and losses deductible below-the-line.

When you win more than $1,200 at the slots, the casino must report your winnings to the IRS. In this court case, the taxpayers mistakenly reported gambling income of $21,100 and the IRS received 1099s showing income of $44,464. This difference in reported income did not look good in court. But these taxpayers fared far better in court than anyone in their right mind could expect because they had proof that this court liked.