Casinos and the IRS

[Dyepaintball12]

I was at a baseball game with an accountant friend of mine (a very new, young tax accountant) and he was asking me about Gambling.

He told me that casinos are required to issue their gamblers tax papers (I forget the form) because the IRS makes them. I was also telling him about Win/Loss statements and he said he would imagine if a casino noticed you were a Large winner over an extended period, they would start wondering why they don't have your SS# and things like that.

I told him I thought casinos are in the business to make money and cater to big players and wouldn't bother looking into the tax-payments of their players.

So what exactly are casinos required to do when it comes to player's taxes? Anything? Do they send win/loss statements to the IRS?


- Dye

[pit15]

Win/Loss statements aren't valid for tax purposes.

If they were no professional gambler would ever pay a dime in taxes. (If they had half a brain)

[mjbballar23]

Originally Posted by pit15

Win/Loss statements aren't valid for tax purposes.

If they were no professional gambler would ever pay a dime in taxes. (If they had half a brain)

^This. I would guess he was referring to the W2-G forms for machine winnings over $1200.

[KingHenry]

casinos are only required to issue W-2G's on total cash amounts of 1,200 or more (so if you put 1000 into a slot and win 250 bucks that'll generate a w-2g). This is the only item that will get reported by the casino to the IRS. The CTRs that are generated for total chip or cash out amounts over 10,000 is for Fed purposes moreso for money laundering and just having tabs on large cash transactions (and is not reported to the IRS with no tax consequences).

The win/loss statements that casinos prepare, only for electronic games though, are for the convenience of the patron. While the casino does not report these to the IRS, the patron may use these win/loss statements as documentation to support the wins/losses on your tax return (although these win/loss statements will not be sent in with the tax return - only shown as documentation when and if the IRS sends you a notice). Keep good records.

[Machinist]

King, you are absolutely wrong on 2 points.....1000 in a machine and win 250 will generate a w2g,,, is false. You have to hit a jackpot of 1200$ or more.
And win loss statements from the casino are not recognized for tax purposes by the IRS. Your own daily records are accepted.
Where the heck could you get this misinformation?

Machinist

[Machinist]

Originally Posted by Dyepaintball12

I was at a baseball game with an accountant friend of mine (a very new, young tax accountant) and he was asking me about Gambling.

He told me that casinos are required to issue their gamblers tax papers (I forget the form) because the IRS makes them. I was also telling him about Win/Loss statements and he said he would imagine if a casino noticed you were a Large winner over an extended period, they would start wondering why they don't have your SS# and things like that.

I told him I thought casinos are in the business to make money and cater to big players and wouldn't bother looking into the tax-payments of their players.

So what exactly are casinos required to do when it comes to player's taxes? Anything? Do they send win/loss statements to the IRS?


- Dye

Dye, if your starting to worry about such issues, my suggestion is to start keeping a daily casino gaming log. Keep all receipts, hotels comped not comped, gas receipts, anything having to do with your gaming activities.

Mac

[KingHenry]

Originally Posted by Machinist

King, you are absolutely wrong on 2 points.....1000 in a machine and win 250 will generate a w2g,,, is false. You have to hit a jackpot of 1200$ or more.
And win loss statements from the casino are not recognized for tax purposes by the IRS. Your own daily records are accepted.
Where the heck could you get this misinformation?

Machinist

you're right about the w2-g's sorry for the misinformation there. as far as the win/loss statements, they're absolutely not formal tax documents. they're helpful as support but you will need to keep accurate records yourself. the rulings aren't cut and dry from the irs, so you're better off keeping as much documentation as possible incase of receiving an IRS notice and a win/loss statement would certainly help if it matches up to your records. here's from the irs website:

"Your diary should contain at least the following information.

The date and type of your specific wager or wagering activity.

The name and address or location of the gambling establishment.

The names of other persons present with you at the gambling establishment.

The amount(s) you won or lost.


Proof of winnings and losses. In addition to your diary, you should also have other documentation. You can generally prove your winnings and losses through Form W-2G, Certain Gambling Winnings, Form 5754, Statement by Person(s) Receiving Gambling Winnings, wagering tickets, canceled checks, substitute checks, credit records, bank withdrawals, and statements of actual winnings or payment slips provided to you by the gambling establishment. "

it depends on your situation as well.. you may be able to get by with less documentation, but its better to have more for tax purposes! one of my old managers told me that the irs once rejected someone's losses as they tried offsetting all their gambling wins with losing horse betting tickets but the horse betting tickets had footprints all over them

[Machinist]

Originally Posted by KingHenry

you're right about the w2-g's sorry for the misinformation there. as far as the win/loss statements, they're absolutely not formal tax documents. they're helpful as support but you will need to keep accurate records yourself. the rulings aren't cut and dry from the irs, so you're better off keeping as much documentation as possible incase of receiving an IRS notice and a win/loss statement would certainly help if it matches up to your records. here's from the irs website:

"Your diary should contain at least the following information.

The date and type of your specific wager or wagering activity.

The name and address or location of the gambling establishment.

The names of other persons present with you at the gambling establishment.

The amount(s) you won or lost.


Proof of winnings and losses. In addition to your diary, you should also have other documentation. You can generally prove your winnings and losses through Form W-2G, Certain Gambling Winnings, Form 5754, Statement by Person(s) Receiving Gambling Winnings, wagering tickets, canceled checks, substitute checks, credit records, bank withdrawals, and statements of actual winnings or payment slips provided to you by the gambling establishment. "

it depends on your situation as well.. you may be able to get by with less documentation, but its better to have more for tax purposes! one of my old managers told me that the irs once rejected someone's losses as they tried offsetting all their gambling wins with losing horse betting tickets but the horse betting tickets had footprints all over them

No sweat king...
Absolutely best to have as much paperwork as you can get. Anything and everything, and if you do get a notice from the the dreaded ones, spend a few bucks for a good attorney. Let them handle it, then you won't get strong armed by the 2bit jerks. Now if it is just a small amount of money we r talking about, just pay them.

Machinist

[Dyepaintball12]

So basically the casinos report nothing to the IRS? What if the IRS comes asking questions about you?

[Richard Munchkin]

Originally Posted by Dyepaintball12

So basically the casinos report nothing to the IRS? What if the IRS comes asking questions about you?

The casino sends W2Gs to the IRS, they send CTRs and STRs to the Justice Department.

You can bet that if the FEDs ask for any paperwork from a casino they will turn it over in a hot second. I have heard of cases where people who were audited found the IRS to have all their win/loss statements from casinos they were playing. But this is mainly for people that the IRS or the Justice Department are looking to go after for some reason or another. I have never heard of this happening to a some random gambler they decided to go after on a fishing expedition.