this Sept. 30 report<\/a> from the independent IRS watchdog group Treasury Inspector General for Tax Administration (TIGTA). It found that 148,908 Americans with gambling winnings exceeding $15,000 failed to file tax returns between 2018 and 2020.<\/p>\nTheir winnings exceeded $13.2 billion dollars, making the unpaid taxes just north of $1.4 billion.<\/p>\n
TIGTA analyzed the W-2G forms generated by casinos when gamblers hit slot jackpots of $1,200 or more or Keno wins of $1,500 or more. Its report noted that 103,000 of these delinquent winners were never issued notices or faced with efforts to bring them into compliance.<\/p>\n
In a response to the report, the IRS wrote, \u201cWe agree with the recommendation,\u201d vowing to begin enforcement actions.<\/p>\n
The Internal Revenue Code states that gains from gambling are fully taxable and must be reported as income by individual taxpayers. Gambling losses may be deducted for filers itemizing up to the amount of their winnings.<\/span>\u00a0<\/span><\/p>\nOther Findings<\/h2>\n
Among the TIGTA report\u2019s other concerns were hundreds of W-2Gs that were filed by casinos without the required taxpayer identification numbers. This makes it extremely difficult for the IRS to trace the winnings to its recipients.<\/p>\n
Also, the watchdog group noted, the IRS has too few processes in place to identify noncompliance with excise taxes by gambling operators, particularly in the rapidly growing online sports-betting market.<\/p>\n
The IRS also agreed with the latter recommendation. However, it disputed the significance of the W-2Gs without taxpayer IDs, since the number was small.<\/p>\n
\u201cWhile this population may not be large in absolute terms, we believe that the amount of backup withholding that should have been withheld is significant,\u201d TIGTA responded.<\/p>\n