re: Poker & Internet Poker (Long read, but I could really use some advice.)
Hey Heman0420. As a fellow servicemember, thanks for your continued service. Are you at Fort Lewis? I understand your caution about online gaming - I just read an article tonight where no shit - a guy got arrested because Blizzard Entertainment gave up his IP address to police when they were subpeona'd for it by police in Indiana - when the cops found out he played World of Warcraft. Crazy, right?
Before I'd read that, I'd say don't worry about it, but after that, you never can tell. The good news is most (if not all) of the online poker sites
are hosted overseas, I believe PS is in Costa Rica, for the simple reason that they do not fall into US Regulation.
As far as these things getting reported - tax wise, it is very difficult to tax the winnings of a tax game player. I could cash out from a table with $1100, but who's to say I didn't buy-in to the table with over $2000? Etc, etc.
I haven't considered sataliting into the WSOP, but it's something to consider as I've got my sights set on the 2011 ME - just have to finish up this deployment and put some money aside for it.
One thing you could (and should) consider - would be calling a law office and asking them about the laws. Also, write a congressman and tell him you are a poker player and would like it to be legal for you to play in your state and that all freedom loving americans feel the same way.
As far as taxes go - call a tax firm - H&R Block. While this site has a great wealth of information from a lot of excellent poker players - these are all legal questions with a lot of fine print that people may not have run into before. I would strongly reccomend you contact the people specialized to answer your question - even though somebody in here might have the answers, it's not likely they'll stumble accross your post in a reasonable amount of time - whereas a 10 minute phone call or two can answer all your questions and get you good information.