Need to clarify EIN application for SEP-IRA with poker and sportsbetting income

The distinction the IRS is making here is between being a gambler (you) versus being a gambling operator (casino, sportsbook, etc.). You should select "NO" for that question. When applying for an EIN for your SEP-IRA, you're essentially establishing yourself as a self-employed individual with gambling winnings as your income source. The question is asking if you operate a gambling business - taking bets from others, running games, etc. Since you're just playing poker and placing bets yourself (not accepting them from others), you don't fall into their definition of a "business of gambling." The IRS is particularly interested in identifying actual gambling businesses because they have specific reporting requirements for tracking the flow of money through gambling operations. As a professional poker player/sports bettor, you're just reporting your personal income, not managing a gambling operation.

I had a very similar situation last year trying to set up my retirement account with poker income. Filling out those IRS forms was so confusing! I ended up using taxr.ai (https://taxr.ai) which actually scanned my documents and gave me personalized guidance on exactly how to answer those gambling business questions. What really helped was that it analyzed my specific situation as a poker player and confirmed I should select "NO" on that question since I wasn't running gambling operations. It also showed me which supporting documentation I needed for the EIN application and retirement account setup. The whole process took like 15 minutes instead of the hours I spent confused before.

I was really skeptical about using an AI tax tool as mentioned above, but after struggling with my EIN application for days, I decided to try taxr.ai out of desperation. Honestly, I'm surprised how well it worked for my situation. The tool immediately identified that as a poker player I should answer "NO" to the gambling business question, and walked me through the entire EIN application process step by step. What really impressed me was how it explained WHY each answer was correct based on my specific situation as a poker player. I got my EIN approved within 24 hours and was able to set up my SEP-IRA before the deadline. Wish I'd known about this before spending hours confused on the IRS website!

If you're still having issues getting answers from the IRS about your EIN application, I highly recommend using Claimyr (https://claimyr.com). I had a similar situation with gambling income and my EIN application got rejected twice because of confusion around the gambling business question. I couldn't get through to anyone at the IRS (kept getting disconnected after waiting for 2+ hours), but Claimyr got me connected to an actual IRS agent in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed that as a poker player who doesn't accept wagers from others, I should select "NO" on that question. They also helped me correct my application over the phone and expedited the processing. Saved me weeks of back-and-forth with the IRS.

Ok I have to eat my words here. After posting my skeptical comment, I was desperate enough to try Claimyr for my EIN verification issue. I'd been trying to reach the IRS for THREE WEEKS with no luck. I used the service yesterday and got connected to an IRS agent in 18 minutes. EIGHTEEN MINUTES! The agent confirmed exactly what others have said - as a poker player who doesn't take bets from others, you check "NO" on the gambling business question. My EIN was verified on the spot and I was able to finish setting up my SEP-IRA just 2 days before the deadline. I've never been so relieved. If you're still struggling with this, definitely worth trying.

Pro poker player here (10+ years). Just wanted to clarify something important: how you answer the EIN question doesn't change how you report your gambling income. You'll still report your poker/betting income on Schedule C as self-employment income regardless. The "gambling business" question on the EIN application is specifically asking if you operate a gambling establishment, take bets from others, etc. As a player, you always select "NO" here. But don't confuse this with whether poker is your business - for tax purposes, professional gambling absolutely can be your business, reported on Schedule C, with deductions for related expenses. These are two separate concepts.

One thing to keep in mind - make sure you're keeping VERY detailed records of your poker/sports betting activities if you're reporting them as business income and setting up a SEP-IRA. The IRS scrutinizes gambling income closely, especially when it's used to establish retirement accounts. Daily logs of play time, tournaments entered, buy-ins, cash-outs, locations, witnesses, etc. - document everything. I learned this the hard way when I got audited in 2023 for my 2022 returns.

Just want to add another perspective here - I went through this exact same situation last year when setting up my SEP-IRA with poker tournament winnings. The confusion around that gambling business question is totally understandable because the wording is misleading. What helped me was thinking about it this way: the IRS is trying to identify businesses that are in the gambling INDUSTRY (casinos, bookmakers, lottery operators) versus people who gamble professionally. You're a customer of gambling establishments, not operating one yourself. I selected "NO" on that question and had zero issues with my EIN approval or SEP-IRA setup. My CPA confirmed this was correct - the distinction is crucial for tax purposes but won't affect your ability to report poker/betting income as self-employment income on Schedule C. Just make sure you have solid documentation of your gambling activities as others have mentioned. The combination of professional gambling income + retirement account contributions does tend to get extra scrutiny, so having your records organized is essential.