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bf_fananatic
25 Mar 12 12:01
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Date Joined: 17 Jul 11
| Topic/replies: 12,682 | Blogger: bf_fananatic's blog
Some American states have the highest tax collections of anywhere in the free world and have a top rate tax of 50%
pretty similar now to the new reduced level in the UK, also this current government is looking for new ways to bring in stealth taxes as it did when last in power. Gamblers, smokers and drinkers are prime targets because of the volumes this can create  and is a way to reel in money paid out by the government to compensate for a poorly developed employment infra-sturture that has been battered by consecutive governments allowing interest rates and banks lending powers to go out of control.

Have you ever wondered why the American Goverment stopped its citizens from having a bet online?

Well firstly many states play footsie in congress with big chains of casinos and this is the reason they dont havehighstreet bookmakers but have many casinos. Secondly the big american states try to pull in as much tax as possible and cant do this when players used to play on overseas sites that are exempt from state law so they had to cut in off at source pretty similar
to what is going on in china where a super power imposing a listeing in of conversation ready to pluck poor citizens from there familys never to be seen again for free speech!

Please find below a hard hitting report on the way Americans are targeted by the IRS if making money via Gambling
and if this uk Goverment decides to follow suit we should all march to london and demonstrate our freedom to gamble freely
without being persecuted by the IRS or goverments that gain power via default !

Big Brother (The IRS) Is Watching
9 January 2002

By I. Nelson Rose (Casino city times)



The Internal Revenue Code is unkind to winners -- and it doesn't much like losers, either. The federal government taxes gambling winnings at the highest rates allowed. So do the many states and even cities that impose income taxes on their residents. If you make enough money in a high-tax state like California or New York, the top tax bracket is about 50 percent. Out of every additional dollar you take in, through work or play, governments take 50 cents.

Of course, the tax-collector first has to find out that you have won. Congress and the Internal Revenue Service know gambling is an all-cash business and few winners indeed would voluntarily report their good luck. So, statutes and regulations turn the gambling businesses, casinos, state lotteries, race tracks and even bingo halls, into agents for the IRS.

Big winners are reported to the IRS on a special Form W-2G. If winnings are to be split, as with a lottery pool, winners are reported on a Form 5754.

Pooling money to buy lottery tickets is common among employees and friends. But whether there are two or 200 in the pool, there is going to be only one winning ticket, and somebody has to turn it in. If you are that someone, make sure you fill out a Form 5754. If your share of a $5 million prize is $1 million, you do not want to be stuck with paying income tax on the entire $5 million.

Gambling has become such big business that the IRS receives nearly four million Forms W-2G and 5754 each year. This tells the tax-collectors that nearly four million big winners are out there, waiting to be taxed.

But the IRS does not always wait. The government wants to make sure it gets paid. What good does a W-2G do if the winner is a foreigner who is going to be in his own foreign country when April 15th rolls around?

So, the IRS not only wants reports filed, but often requires that a part of the winnings be withheld. As anyone who has a salary knows, withholding also allows the government to use taxpayers' money for many months, without having to pay interest.

The withholding rate for nonresident aliens is 30%. Not coincidentally, the tax rate for nonresident aliens is also 30%. So, if a citizen of a foreign country wins $1 million cash at a slot machine in Las Vegas, he will find he is paid only $700,000. The remaining $300,000 is sent to the IRS. The foreign citizen is unlikely to ever file an income tax return, but the IRS gets paid in full anyway.

Citizens of foreign countries are also, of course, usually taxed by their own governments. So some countries have treaties with the U.S. that protects those foreigners from having to pay the 30% withholding to the IRS.

U.S. citizens and resident aliens have it both better and worse than nonresident aliens. The withholding rate for gamblers living in American is only 28% (it was 20%, up to 1992). Having the IRS take $28,000 out of a jackpot of $100,000 is painful. But, it can hurt even more when tax forms are filled out. There is no 30% maximum tax for people living in the U.S., and really big winners often end up paying a lot more than 28% or 30%.

The one good news is Nevada casinos were also able to convince the IRS that they could not keep track of players at table games. They said that when a player cashes out for $7,000, they do not know whether he started with $25 or $25,000. So it is actually written into the law that there is no withholding or even reporting of big winnings to the IRS for blackjack, baccarat, craps, roulette or the big-6 wheel.

There is another general IRS rule that says anyone paying anyone else $600 in one year is supposed to file a report. The IRS has been going after casinos and cardrooms that run tournaments, forcing them to file tax reporting forms on grand prize winners. Here the IRS has the very good argument that the operator knows exactly how much a player has paid to enter the tournament and how much the finalists are given.

Is there anything a winning player can do to lower the bite of the income tax? And what about those who gamble and lose? Which is everybody, occasionally. The law does allow players to take gambling losses off their taxes, but only up to the amounts of their winnings.

Of course, if you win, say $135,000, you can take off all gambling losses, up to that amount. If you gambled away, say $65,000, you would only have to pay taxes on the remaining: $135,000 minus $65,000 equals $70,000. The tax on $70,000 is a lot less than the tax on $135,000.

Of course, you have the small problem of proving that you actually lost $65,000. Large winnings may be required to be reported to the IRS; large losses are not.

One former IRS Revenue Officer, who quit government to open his own small tax preparation firm, thought he found the answer. One of his clients won a share in a state lottery: $2.7 million, paid out over 20 years in installments of about $135,000, before taxes. The winnings were reported, but the tax return claimed gambling losses of $65,000. The IRS decided that $65,000 was a lot to lose, and it sent an agent to conduct an audit.

The tax preparer found a man with an extremely large collection of losing lottery tickets and made a deal: he would borrow 200,000 losing tickets for a month for $500. The losing tickets were bound in stacks of 100 and shown to the IRS auditor: 45,000 instant scratch tickets, 5,000 other Massachusetts lottery tickets, and 16,000 losing tickets from racetracks throughout New England. So many losing tickets, that it would have been physically impossible for one man to have made these bets. The New York Times called it "one of the more visibly inept efforts at tax fraud." They pleaded guilty eight days after being indicted.

By the way, the man who rented the tickets was not charged. It's not a crime to collect losing lottery tickets, only to use them to try and cheat the IRS.
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Report bf_fananatic March 25, 2012 1:15 PM BST
One wonders how far this Phoney Uk goverment has got creating its version of the Yankee
IRS special Form W-2G, then all gambling companies will report all big winners.
Personally I cant the UK people lying down for this one if it happens and we are waiting for There next moveCool
Report Nebs March 25, 2012 1:55 PM BST
Not sure about the bit about non resident aliens.
I've had a tax refund from the USA of the 28% tax deducted from money won while on holiday in the states. The UK has a tax treaty with USA and Article 22 covers gambling and effectively says that winnings are only taxable in the place of your residence. At least, thats how I interpreted it when I sent them a USA tax return and claim for a refund, and they must have agreed as they sent me back all the tax that had been deducted. I was told that you can get a tax reference number that saves them stopping the tax in the first place, but never bothered to look into this. This was about 6 years ago, so things may have changed since then.
Report bf_fananatic March 25, 2012 2:08 PM BST
Good point Neb and this was explained in the article but bear in mind that if the UK governments adopts the same hard line against its own voters/people then in your past example case you would be jumping out of one frying pan and into another and my question is if the government and IRS are going down this route are we going to let this happen as it will effect everyone that plays the lottery, bets on-line, goes to bingo, plays cards, but if you read the article its strange that casinos are exempt from this law as they don't want to lose big customers that play up and down with big stacks, pretty biased but not unknown in a country that gives more rights to bigger corporations than smaller relative to golden handshakes when requiring cash to fuel election campaigns!
Report bf_fananatic March 25, 2012 2:08 PM BST
Who was it wrote "thier is nothing stranger than the truth"
Report Gerry Gallbladder March 25, 2012 2:12 PM BST
Was it Jade Goody?
Report dave1357 March 25, 2012 3:59 PM BST

Mar 25, 2012 -- 8:08AM, bf_fananatic wrote:


Good point Neb and this was explained in the article but bear in mind that if the UK governments adopts the same hard line against its own voters/people then in your past example case you would be jumping out of one frying pan and into another and my question is if the government and IRS are going down this route are we going to let this happen as it will effect everyone that plays the lottery, bets on-line, goes to bingo, plays cards, but if you read the article its strange that casinos are exempt from this law as they don't want to lose big customers that play up and down with big stacks, pretty biased but not unknown in a country that gives more rights to bigger corporations than smaller relative to golden handshakes when requiring cash to fuel election campaigns!


casinos aren't exempt from anything.  The article just stated that there was no way of knowing if someone was a winner when they cashed chips from a table game, so there is no withholding tax.  If you win $5k+ from a slot machine or poker tournament in a casino, tax is withheld (uk citz can show their passport and complete form 1042-S and should be exempt from withholding).

Report dustybin March 25, 2012 4:36 PM BST
its actually good to see that they treat their own residents with the same disdain they treat the rest of the world through foriegn policy that results in them being perhaps the most hated country on the planet.Laugh
Report Brother Mouzone March 25, 2012 4:41 PM BST
The Mob and Colombians want their cut imo
Report VALUEMAN March 25, 2012 5:03 PM BST
Pretty sure when I went to Aquaduct there was an IRS window where winnings over a certain amount were collect.....complete with CCTV camera monitoring procedures
Report bf_fananatic March 25, 2012 5:54 PM BST
The American system not only promotes greed but bleeds its own citizens and corales them into there preferred type of IRS intergrated gambling and one could also make the point that they are very good at telling the rest of the world who is wrong and right as long as it supports its own interests(in this case telling overseas Gambling sites not to allow US citizens access to there services).

We shall throw there style of unfair taxing in the same place as the Boston tea wentWink
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