Tax Court Rejects Wikipedia Definition of ‘Gambler’s Fallacy’
The U.S. Tax Court was not impressed with the Internal Revenue Service’s attempt to use a Wikipedia definition to quibble with the meaning of “gambler’s fallacy.”
At issue was expert testimony that the taxpayer who had claimed $2.5 million in gambling losses was a pathological gambler who suffered “from the almost delusional belief that if he gambled long enough, he’d win everything back or break even”—the gambler’s fallacy, in the words of the taxpayer’s expert, TaxProf Blog reports.
The IRS had argued that the taxpayer had not adequately substantiated his gambling losses, despite testimony that he began to obsessively play casino slot machines after winning more than $26 million in the California Lottery. The taxpayer offered ATM receipts for millions of dollars and tax forms for his slot machine winnings in support his testimony.
The IRS countered that the definition of this “gambler’s fallacy” was incorrect, relying on the Wikipedia definition. The court discounted the IRS evidence in footnote 18 of its opinion (PDF).
“Although we conclude that the information respondent obtained from Wikipedia was not wholly reliable and not persuasive in the instant case, we make no findings regarding the reliability, persuasiveness, or use of Wikipedia in general,” the court said.
