Jonathan Duhamel is facing a legal battle against the Canada Revenue Agency for $1,800,000. In a complete role reversal Duhamel is claiming that his winnings are from a game of chance and nothing to do with skill, therefore tax exempt.
Jonathan Duhamel Faces an Uphill Battle
This is far from the first story about federal tax authorities chasing a high-stakes poker player for a share of the profits, but it is probably the first time we have seen such a player claiming the game is all down to chance.
When the 2010 World Series of Poker Main Event champion received notice that he owed the government money it’s understandable that he would do whatever it took to avoid such a huge bill.
Canadian tax law states that monetary winnings from a game of chance do not require any payment to the CRA and now Duhamel now finds himself in the peculiar position of having to lie through his teeth about poker being a skill game.
He is being pursued for CA$1,219,114 in federal taxes, which if he is found owing this might double when state taxes are added on. Not a great situation to be facing for the 33-year-old.
It’s going to be an uphill battle for sure because the tax man rarely backs down once he has his prey in sight.
Is Poker a Business?
When Dusty “Leatherass” Schmidt wrote his book Treat Poker Like a Business he probably wasn’t thinking the IRS would ever pay any attention. It seems like some people were.
With $18 million of live tournament winnings putting the Canadian in 33rd place on the all-time winners list, Jonathan Duhamel is a prime target for the tax department in his country. Let’s face it, every tax organisation is there purely to collect as much as they possibly can, regardless of what carnage they cause.
There was a case involving Spanish chess grandmaster Paco Vallejo Pons a couple of years back, where he was hit with a massive bill for his winnings well after the fact, even though he was a losing player.
Duhamel is being targeted for running his poker career like a business. It is claimed that he is not exempt because the professional manner in which he conducted himself. TheCanadian.news reported,
“…a Canadian tax resident who carries on a business must pay taxes on his profits, regardless of his type of activity. And the CRA considers that Jonathan Duhamel, who lives in the greater Montreal area, operated a business as a professional poker player,”
Will Duhamel’s Case Succeed?
The reasons behind the CRA’s case are all arguments we have seen before. In a region such as the Indian market, lobbyists are fighting to prove that poker is a professional game and use such arguments as those used against Duhamel.
One interesting point that has cropped up is that of swapping action. This is quite normal to ride out variance for tournament players but we have never seen it used as a matter of professionalism.
After winning the WSOP Main Event Duhamel was signed up by PokerStars as a professional in an ambassador role. He now must claim that was purely for marketing purposes. It’s a real long shot but we wish him the best.
We will resume reporting on this story when the court hearings begin in March 2021.
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