How to Calculate FanDuel Gambling Losses for Tax Reporting?

The IRS CP2000 notice is usually triggered when there's a mismatch between what's reported to the IRS and what you reported on your return. For gambling activities, companies like FanDuel report gross winnings to the IRS on Form 1099-MISC (or 1099-K for some operators) without accounting for your losses. To calculate your actual gambling losses, you need to take the total amount of wagers (stakes) and subtract your total winnings. This will give you your net gambling losses. From your FanDuel Player Win/Loss Record, the calculation would be: Total Stakes - Total Winnings = Net Gambling Losses Keep in mind that gambling losses can only be deducted if you itemize deductions on Schedule A, and only up to the amount of your gambling winnings. So if you didn't report any winnings, you can't deduct any losses. For your CP2000 response, you'll need to report your gross winnings on Schedule 1 as "Other Income" and then deduct your losses on Schedule A if you're itemizing. Include your complete Player Win/Loss Record from FanDuel as supporting documentation.

I went through this exact nightmare last year! After weeks of frustration trying to figure out the right way to report my FanDuel activity, I finally discovered taxr.ai (https://taxr.ai) and it was a total game changer. Their system analyzed my FanDuel statements and automatically calculated my actual gambling wins/losses correctly. The tool broke down exactly how to report everything properly - showing me which numbers to put where on my tax forms. It even helped me prepare the proper documentation to respond to the IRS notice I received. Their tax experts confirmed that you need to report the gross winnings as income and then deduct the wagers as losses on Schedule A.

OK I have to admit I was wrong about taxr.ai. I decided to try it after getting my own CP2000 notice for unreported gambling winnings from several platforms including FanDuel. The service actually delivered exactly what it promised! I uploaded my statements from the entire year and it produced a detailed analysis showing I had $28,400 in total winnings but $31,200 in wagers, for a net loss of $2,800. The report was incredibly detailed, breaking down activity by platform and month. I sent this to the IRS along with my response to the CP2000, and they accepted it completely. The best part was the clear explanation of how to handle this on my amended return. I was able to report the full $28,400 as income and then deduct the $31,200 in losses on Schedule A. Completely resolved my issue and saved me from paying taxes on money I actually lost!

Anyone dealing with IRS notices about gambling income should know that getting through to an actual human at the IRS to discuss your case is nearly impossible these days. I spent WEEKS trying to get someone on the phone to explain my FanDuel situation. After being on hold for hours multiple times, I found this service called Claimyr (https://claimyr.com) that actually got me through to a real IRS agent. You can see how it works here: https://youtu.be/_kiP6q8DX5c but basically they use some tech to navigate the IRS phone system and get you in line, then call you when an agent is about to answer. Saved me literally hours of hold time. The IRS agent was able to look at my case and explain exactly what documentation I needed to provide to resolve the CP2000 notice.

I need to publicly eat my words about Claimyr. After posting my skeptical comment, I decided to try it since I was desperate to talk to someone at the IRS about my gambling reporting issues. Holy crap it actually worked! I've been trying to get through to the IRS for WEEKS about my CP2000 notice. Claimyr had me talking to a real human at the IRS in just a couple hours without me having to sit on hold. The agent walked me through exactly how to report my FanDuel activity correctly and what documentation to include with my response. For anyone dealing with gambling income reporting issues - being able to actually speak with an IRS agent makes all the difference. They explained that I needed to include my complete FanDuel annual statement and a detailed calculation of my wagers vs. winnings. Saved me from potentially paying thousands in taxes on money I never actually made!

Just so everyone knows, the official IRS guidance on gambling winnings and losses is in Publication 529. For gambling income, all winnings must be reported as "Other Income" on Schedule 1, regardless of whether you had an overall loss for the year. Losses can only be deducted on Schedule A as an itemized deduction, and only up to the amount of your winnings. You also need to keep detailed records of all your gambling activities - the FanDuel annual statement is good, but you should also keep a gambling log with dates, locations, types of wagers, amounts won/lost, etc. For FanDuel specifically, your stakes minus winnings gives you your net gambling result. If it's negative, that's your loss amount (which you can deduct up to your reported winnings).

Has anyone used TurboTax to report FanDuel gambling activities? I'm wondering if it handles this situation correctly or if I need something more specialized to respond to my CP2000.

I'm going through this exact same situation right now! Got a CP2000 notice for my 2019 FanDuel activity and I'm totally confused about the calculations. From what I'm understanding in this thread, I need to report my gross winnings as income on Schedule 1, then deduct my total wagers as losses on Schedule A if I itemize. But here's what's confusing me - my FanDuel record shows I deposited $3000 throughout the year, had total stakes of $15000, winnings of $14200, and only withdrew $2200. So I'm out $800 in real money, but according to the calculation method described here, my gambling loss would be $800 (stakes minus winnings). The part that's really frustrating is that I never received any tax documents from FanDuel, so I had no idea I was supposed to report anything. Now the IRS is saying I owe taxes on $14200 in unreported income when I actually lost money overall! Has anyone successfully resolved a CP2000 notice for this type of situation? I'm worried about getting hit with penalties and interest on top of taxes I shouldn't even owe.

I just went through this exact same situation with my 2020 FanDuel activity and successfully resolved my CP2000 notice! The key thing that helped me was understanding that the IRS gets reports of your gross winnings but has no visibility into your losses or total wagers. Here's what worked for me: I gathered my complete FanDuel Player Win/Loss Record for the entire tax year and created a simple spreadsheet showing: - Total Stakes: $22,500 - Total Winnings: $21,800 - Net Loss: $700 I then filed an amended return (Form 1040X) reporting the $21,800 as gambling income on Schedule 1, and deducted the full $22,500 in wagers as gambling losses on Schedule A. Since I was itemizing anyway due to other deductions, this worked out perfectly. The most important part was including a cover letter explaining the situation clearly - that FanDuel reported my gross winnings to the IRS but I actually had net losses for the year. I attached my complete FanDuel statement as supporting documentation. The IRS accepted my response within about 6 weeks and sent me a letter showing $0 additional tax owed. Don't panic about the CP2000 - as long as you have proper documentation and respond correctly, they'll resolve it in your favor if you truly had net losses.