A Gambling Suggestion

I live within a 15 mile drive of 3 casinos. I have benefited from their proximity because of the number of clients who have found employment there and the number of clients who have found their slots. But I have a big grip - they are allowed to give hand written W-2Gs and 1099MISCs to their winners. (They also give tax advice but that's another post.)

Here's what happens. A casino patron wins, either a jackpot, tournament or a prize, and if the winnings are enough, the casino takes the winner aside to get some info and write up the required tax information form. Once the paperwork is completed the winner is given their copy and the casino employee goes to the next winner. The taxpayer then brings me that W-2G or 1099MISC when they do their taxes. Most of these are hand written and by the time I see them they are pretty much illegible. The first problem is they are written, mostly, by young women who penmanship borders on calligraphy. Pretty but there are always questions like; "is that a 2 or 5 or a or o?" These forms are written on NCR paper and the fading and fuzzy copies are my second issue. Finally, compounding the issue is that the client is taking less that good care of them. The W-2Gs and 1099MISCs end up stuffed in a wallet or purse for months. I have seen some mistreated W-2s but nothing like the condition of most gambling docs.

But...as inconvenient as these issues are to me, the real question is what the IRS gets. Who is transcribing the handwritten form into a computer form that can be searched and matched. Are the casinos sending the IRS copies of the originals and the iRS entering them or is the casino taking the taxpayer info from the W-2G or 1099MISC and entering it into a computer that generates the electronic file that is sent to the IRS? (My guess is the casino is transcribing but I can't get a confirmation on that.) My big problem is the CP 2000 notices clients get when there is a discrepancy between what the IRS has on file and what the client put on their return.

A 2008 return was filed with 5 1099MISCs from one casino and a 6th from a different casino (these were tournament winnings and considered prizes so Form 1099MISC). A CP2000 was received because of matching issues. Of the 5 from Casino A, what the IRS has on 4 of them does not match the copies I have. 1 was correct. Client only had one from Casino B but what the IRS had on record was over 40 times larger that the 1099MISC I had. The client contacted Casino B and they did admit there was a mistake and they sent a letter correcting that problem. Oh, and they didn't give the IRS the info on the 1099MISC the client did have so now there are 2 1099MISCs from Casino B. 3 of Casino A's 1099MISCs problems were with withholding. It didn't get into the IRS record at all and there were issues with the amount of the prize on 2 of them. Thankfully, the IRS accepted the copies of the 1099MISCs we sent in and the client received credit for all the withholding we showed but was all that money actually sent in or is it now part of the tax gap? And this was just one client for one year. How often does something like this happen?

I'm proposing that the casinos take one step out of their process and put the winner's info into a computer at the time of the win and use that info to generate a neat printed W-2G or 1099MISC. Make this the file the IRS gets. It may take up a minute or two more of the gambler's time but it will save the rest of us time and aggravation down the road.

Comments

[Skraplotter]

wow the blog is really amazing and give the nice tips about the gambling.

thanks for sharing such a nice stuff..