I have downloaded this from the other forum and I consider it to be a succinct explanation of Walsh's situation...
'The Australian Taxation Office have every right to expect Tax to be paid on Income. It has been clearly stated by both TATTSBET and TABCORP that the REBATES Do Not come out of the TAB Pools. They are taken from the TAB Profits that result from their WAGERING business.
This is a business arrangement established under the TAB AFFILIATE Program, and is a COMMISSION paid to a select group of punters.These REBATES are clearly INCOME, as they are not a component of the bet wagered.
The BET is independently placed in the Wagering Pool that you and I bet into, according to the TAB's and is not impacted at all by rebates.
If it was a part of the wagering pool, then both you and I would also be receiving rebates, which we don''t.
It is a clear separate income stream, that all parties who receive should have to declare as Income and pay TAX on, as a TAXABLE EARNINGS, just like you and I do when we receive a dividend on our shares."
If the ATO pursue Walsh purely on the rebates received that negates losing punters claiming their losses as tax offsets.
If those rebates were not paid by Tatts or Tabcorp they would be included in those company's profits and would be taxable, therefore by giving /transferring the rebates to Walsh, surely they are transferring their tax liability onto the other party ( Walsh ) .