The IRS is cracking down on people who don’t pay taxes on their gambling winnings after a recent audit showed that over $1.4bn went unpaid. A recent Treasury Inspector General for Tax Administration (TIGTA) report highlighted that 139,045 people in the US who won over $15,000 from 2018 to 2020 did not file the necessary tax returns to report this income.
will start with the 100 biggest cases
The analysis estimated that gambling winnings totaled over $13.2bn for the period, which led to the $1.4bn unpaid taxes figure. About 103,000 of the non-filers did not receive any notice or enforcement action from the IRS; TIGTA recommended the agency begin doing so. The IRS agreed with this advice and said it will start with the 100 biggest cases.
Another issue the report uncovered was people filing the W-2G gambling winnings forms without providing a Tax Identification Number (TIN), making it more difficult for the IRS to track compliance. Additionally, the IRS lacks proper systems for spotting tax compliance failures by gaming operators, especially among companies in the online sports betting space.