I’m sure as a tax professional you’ve heard a few tall tales that made you chuckle. Well wait until you hear about the new scam aimed at the IRS involving losing lotto tickets.
Those creative gamblers have come up with a way to avoid paying taxes. A winning gambler can purchase thousands of dollars’ worth of losing lottery tickets to offset their gambling winnings. They repurpose the tickets as “proof” of the expense.
It gets better! The gamblers that don’t want to waste thousands of dollars buying trash (dud lotto tickets, racetrack receipts, sports book receipts, etc.), can pay a fraction of the cost to simply rent them for a limited amount of time and return them.
I cannot stop laughing, I’m picturing hoarders digging through trash on The Strip in Vegas, taking their treasures home to add to the massive collection they have stock piled hoping to cash in big when the jackpot winners don’t want to part with their winnings. Shady men walking the streets peddling losing lotto tickets…ok you get the picture.
So, if you ever have a client that pulls up to your office with $10,000 worth of losing lottery tickets in the back of his pickup truck, please lock the door. The IRS isn’t going to give up that easily, and prison attire is not flattering on anyone.
If you have a legitimate gambler on your hands who needs some advice, the best thing to tell them is to keep a very detailed running diary with each transaction they make during the year or to ask their favorite Casinos for a win/loss statement for tax purposes.