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Untaxed Wins Lure Students to Online Gambling

Pat earns at least $200 a week. It just depends on the luck he has in his poker game.The University of Nebraska-Lincoln political science and communications studies major plays poker with a group of friends about three times a week. Like other students, he doesn’t register his winnings on a tax form.

Pat, who said he didn’t want his last name published, realizes he could be punished for his actions.He could face punishment from UNL Student Judicial Affairs, state legal officials and Internal Revenue Services agents.

But Pat won’t – and can’t –stop gambling.He gambles to pay for some of his student bills, insurance bills or just for a night on the town.To him, the money is free and he has a good time winning it.

Donna Migazzi, an Internal Revenue Services spokeswoman, said Pat’s gambling habits could be classified as a form of tax fraud.She said the IRS has a W-2G tax form which gamblers use to register each winning, so the money can be accounted for and taxed.Lack of a tax record doesn’t deter the IRS from prosecuting those hiding their gambling winnings.

“We have many vehicles to get information about unreported sources of income,” she said.When people gamble at non-online casinos, a W-2G form is sent to the gambler and an IRS agency, said Harrah’s spokesman David Strow.“We are very familiar with the W-2G form,” he said. “Anyone who works at a casino should be aware of it.”

But a representative from Casino-on-Net, a gambling Web site, said the site doesn’t use the W-2G form because some gamblers aren’t U.S. citizens.The loophole is how Pat sneaks past taxing rules. Online casinos don’t use the necessary tax forms, and he’s not about to fill out one voluntarily.

Read the entire article at: Daily Nebraskan 

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