Poker professionals win thousands and even millions of dollars in tournament play over the course of their careers. However, what a lot of people don’t realize is that they have to pay taxes on these wins. If you don’t pay taxes long enough, the IRS is likely to catch up with you, and that’s exactly what has happened to Michael Mizrachi.
Mizrachi currently owes the IRS to the tune of $339,000 in Federal taxes and he is facing foreclosure. The U.S. Government has already seized some of Mizrachi’s real estate in an effort to settle his tax issues. A condominium in Hollywood, Florida that Mizrachi owned with his brother was foreclosed, as well as another property, which the government will be selling in auction next week.
According to Mizrachi, he did not intentionally avoid paying taxes. He says that his accountant was simply “doing a bad job.” He has a new accountant on board now to help settle the problem. Mizrachi’s taxes are owed on his earnings between 2005 and 2007. At least Mizrachi is able to keep a sense of humor about things. He says, “Obviously I’m a better poker player than a businessman, but I’m getting better.”
This story should serve as a warning for poker tournament players that have not considered their tax responsibilities. If you have won money in a tournament or plan to participate in big tournaments in the future, consult with an accountant and make sure you don’t end up in Mizrachi’s shoes!