A when ago, my mother received a letter from the IRS stating she owed tax (plus penalties and interest) on her jackpot winnings at a Delaware casino in a prior year. They incorporated a copy of the W2G kind that she (according to them) had neglected to claim on her Federal tax return. Mom had not been to that Delaware casino in that year mainly because there are now additional than adequate casinos in our state exactly where you can play and drop your dollars.
My mother didn't know exactly where to start to get this resolved, so she known as for my aid. As an accountant, my initial believed was to see a copy of the receipt the winner had signed though she collected her jackpot. Mom known as and asked the accounting division to fax a copy of the receipt to me.
It clearly was not my mother's signature on the receipt. Right after a second contact to the casino, we discovered numerous issues about how the accounting is handled at casinos.
Turns offered is yet another individual with the exact same name as my mother, but an additional address and Social Safety quantity. This individual and my mother had each signed up for the casino's 'club' card, and I suppose they both had to provide their Social Safety quantity. This is the card you place into the slot machine you are playing that is supposed to track your winnings and supply things for free of charge meals, and so on.
Nonetheless, it appears like the casino had not bothered to confirm the right SSN although they filled out the paperwork for the winner, and as a result filed an wrong W2G to the Internal Income Service for that jackpot. Meanwhile, my mother was becoming billed for the tax on the winnings, plus penalties and interest, though the genuine winner was not, and the clock kept ticking on the interest till this was resolved.
Yet another contact to the casino was a small frustrating, as the accounting division had no concept how to solve the difficulty. (As an accountant, I knew they would have to send in a corrected W2G below my mother's SSN stating no dollars, along with a new W2G stating the income for the winner below the right SSN.) We referred to as the IRS and they confirmed the want for the casino to file these two types, and then we had to get in touch with the casino to clarify how they required to do their job to appropriate this.
Weeks later, Mom received a corrected W2G from the casino and I wrote a letter to IRS explaining the scenario and asked for the penalties and interest be reversed. Ultimately the case with the IRS was resolved, but not devoid of a lot of aggravation and time. The casino didn't look also fazed with the error - they did apologize, but we will under no circumstances go there once again. I had Mom contact them to cancel her 'club' card so this would not come about once again-to her, at least.
The lesson discovered here is... if you do delight in playing the slots or table games at a casino, do be confident to retain track of your winnings. If it really is readily available to you, ask the casino for a list of your year-to-date winnings at the end of December to make positive it agrees with your real figures, and query something that appears incorrect. I am certain there are jackpot winners who wind up paying tax on revenue they did not win.
Never let the casinos gamble with your taxes!
Copyright © 2014 Kay Swann
Kay Swann has over 35 years accounting practical experience managing the economic departments for numerous corporations. She grew tired of functioning for other folks, and now runs her own small business giving consulting and accounting solutions for little firms and men and women in the Annapolis location in Maryland.
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