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if you found a winning ticket that wasn't yours

Topic closed. 194 replies. Last post 9 years ago by psykomo.

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if you found a winning ticket that wasn't yours that was worth millions what would you do?

keep it for yourself [ 69 ]  [65.71%]
return it to the lottery office [ 5 ]  [4.76%]
ponder the possibilities [ 10 ]  [9.52%]
give it to the store owner [ 0 ]  [0.00%]
offer it to passerby [ 0 ]  [0.00%]
give it to charity [ 0 ]  [0.00%]
smoke a cigar [ 0 ]  [0.00%]
call a lawyer [ 9 ]  [8.57%]
get a number 3 on the dollar menu(frosty included) [ 4 ]  [3.81%]
other [ 8 ]  [7.62%]
Total Valid Votes [ 105 ]  
Discarded Votes [ 3 ]  

United States
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June 22, 2005
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Posted: June 5, 2007, 11:45 am - IP Logged

I started out by saying I didn't want to get into a long discussion about this, because people here are misinterpreting the rules.  Where is KY Floyd when I need him?  LOL

Yes, it is required that income or prizes over $600 need to be reported by the Payor.  It DOES NOT say you don't have to claim it as income.  Where does it say that? 

Anyway, there would be no reason to do it if it was never reported, unless you have a guilty conscience and feel sorry for the IRS.  I was only answering a question that asked if, by cashing in ten $500 winning tickets instead of claiming one $5,000 ticket it would be avoiding taxes and the answer is YES.  Isn't that why someone would do that?? 

I don't want to keep writing about this, since you can do what you want and continue to get paid for jobs and not report your income.  I am an independent contractor and report everything I earn doing my job.  That is what you are supposed to do.  When those passengers you mention hand you a nice $50 tip, you are supposed to keep a record of that. If you don't want to keep a record of your tips and put the money in your pocket, that is totally up to you.  The Law reads that all income and tips must be reported. Case closed.

Yes, it is required that income or prizes over $600 need to be reported by the Payor.  It DOES NOT say you don't have to claim it as income.  Where does it say that? 

So let me ask this question. Why would they even have this whole 600 business in the first place? Why is it even mentioned? If it is taxable, meaning under 600, why didn't the IRS just say all lottery prizes are taxable?

Basically, what is the purpose of this whole 600 business anyway?

Does anyone know why they even have it on documents?

    KyMystikal's avatar - 1457224010054
    Florence, Alabama
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    Posted: June 5, 2007, 12:04 pm - IP Logged

    I started out by saying I didn't want to get into a long discussion about this, because people here are misinterpreting the rules.  Where is KY Floyd when I need him?  LOL

    Yes, it is required that income or prizes over $600 need to be reported by the Payor.  It DOES NOT say you don't have to claim it as income.  Where does it say that? 

    Anyway, there would be no reason to do it if it was never reported, unless you have a guilty conscience and feel sorry for the IRS.  I was only answering a question that asked if, by cashing in ten $500 winning tickets instead of claiming one $5,000 ticket it would be avoiding taxes and the answer is YES.  Isn't that why someone would do that?? 

    I don't want to keep writing about this, since you can do what you want and continue to get paid for jobs and not report your income.  I am an independent contractor and report everything I earn doing my job.  That is what you are supposed to do.  When those passengers you mention hand you a nice $50 tip, you are supposed to keep a record of that. If you don't want to keep a record of your tips and put the money in your pocket, that is totally up to you.  The Law reads that all income and tips must be reported. Case closed.

    I'm going to agree with you justxploring. I too beleive that that is tax evasion with the seperate tickets but I think that's what most people do. People are supposed to report all winnings but don't. A really honest person would report those winnings and pay taxes to which the IRS have no way of knowing about.

    To answer the other case, Any wages earned will be reported by an employer because it is the law. I got a w-2 last year for a job that I worked. So if you are one of the unfortunate ones who happen to get audited and they ask you to get all your paper work and meet with them I hope you reported all those $200. and $500 incomes from employers because they have. When the IRS finds out you have discrepancies in your return they will start to look over previous years for other errors.

    I love doubles and remember, it's just a game!!!!!!

      LuckyLilly's avatar - savy chick.png

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      Posted: June 5, 2007, 12:39 pm - IP Logged

      From what I understand, justxploring is correct.  Just because they're not required to report smaller wins to the IRS doesn't mean you don't owe taxes on them.  Now, proving you received the money is another matter altogether, but if the IRS can prove it, you're in deep doodoo.

      The reason they don't require reporting on smaller amounts than $600 is because the paperwork burden is too much for, say, a radio station who gives away 25 cd's a day or a sweepstakes that gives away 1,000 t-shirts, or the powerball game that gives away 10,000 $3 prizes twice a week.   (I made up the powerball number cuz I'm too lazy to research but I bet they give at least that many.)  It would be unreasonable to require those winners to fill out all the forms and give their social security number to claim $3 or a stupid t-shirt, and unreasonable to expect the giver to jump thru all those hoops too.  They had to make a cut-off point somewhere, and I guess $600 is as good as anywhere.

      As for why an ex tax preparer doesn't think taxes are owed on amounts under $600.  Well, maybe there's a reason why they're an ex tax preparer.  LOL

        justxploring's avatar - villiarna
        Wandering Aimlessly
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        Posted: June 5, 2007, 1:12 pm - IP Logged

        Edit:  Thanks, LuckyLilly and KyMystikal.   I wrote this before I read your posts.  I got a phone call, which happens a lot. So I am repeating some of the things you wrote. 

        It's for paperwork reduction, Pac.  If you think about it, if all businesses were required to report every single employee or contractor that works for a few hours, a day, a week or makes a little part-time income, some would be submitting 100s of extra W-2 or 1099 forms.  Sometimes a business just writes a check to a worker and might pay him out of "petty cash" or a "misc expense fund" which is okay too.  Let's say I ask someone to accompany me on a call where the client only speaks Spanish.  I can pay him $100 as a translator and not report it.  But if I also deduct it from my total income and the IRS ever audited me, I wouldn't be the person in trouble if he does this for a living and earns $100 a day from different sources.  If I hire someone to make phone calls and set appointments for me, I can write that off too.  What that person does with the income or how he/she decides to report to the IRS is none of my business, as long as I follow the guidelines when I'm filing.

        Technically, if you drive around Bonita Springs and make $30 washing & waxing cars and another $25 mowing lawns, you are supposed to declare that income.  Would you?  Of course not.  Why do you think many retailers like cash?  If you walk into a pet store, for example, and you pay $100 cash for some tropical fish and don't ask for a receipt, the store owner can just pocket the money. Of course he'd have to adjust his inventory, which is easy. They died right?  Nobody will ever know.  However, it doesn't mean it's kosher. I've known people who write credits if they want to take $50 out of the cash register to go to dinner.  Is it stealing if it's your own store?  Probably nobody here (including me) would say it is, but it's stealing from the IRS.  I don't work for the IRS, I hate paying taxes and I think we should all protest. However, this isn't about what I believe.  It's about the legal requirements and ALL income is taxable, even the lousy $20 you get paid for jury duty.  (which is ridiculous since you are probably losing income that day)

          justxploring's avatar - villiarna
          Wandering Aimlessly
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          Posted: June 5, 2007, 1:58 pm - IP Logged

          Pac, I am sure about reporting wages from personal experience, but I never won enough gambling to report it.  The IRS rules & regulations and confusing, but here is an article from Bankrate.com I found that might help (or not!)  One paragraph states:

          When you have to report it
          Even if you didn't win enough to trigger W-2G filing, you do want to be a diligent taxpayer and report those gambling winnings, right? The casino, track or lottery agent might not have reported that $25 you won, but it's still taxable income. It's ultimately the taxpayer's responsibility to tell Uncle Sam about his good fortune.

          http://www.bankrate.com/brm/itax/tips/20010131a.asp

          So when I said "yes, it's tax evasion" I certainly wasn't suggesting to report the lousy $80  bucks someone wins for a 3/6 prize or even the $500 for Cash-3.  I was only stating what is our responsibility as good citizens of the USA so they can spend another trillion or so on a foreign country that hates us.


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            June 22, 2005
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            Posted: June 5, 2007, 2:05 pm - IP Logged

            Too much paperwork? Are you kidding me? HA

            Lets see....how many cash 3 games in the U.S.? HMMmm

            How many straight and boxed wins combined from all states? HMMM

            You're right., the IRS wants no part of all those winning tickets....LOL

            You guys keep mixing earnings with prizes. Two different animals.

            Believe you me, If the payout of straights, boxes, and the lower p-5 wins(atleast here in Florida where it rolls down if no one hits the jackpot, which usually pays about 80 to 120 bucks) was very low across all states, sure the IRS wouldn't want to deal with the paperwork, but we're talking millions in smaller tier payouts on a weekly basis across the states. The paperwork is not the reason.

            Cimon folks, you gotta come up with a better reason than that.

            As far as t-shirts and CDs, they are not currency.

            It's just like the minimum on paying taxes in the first place. I think, depending on your situation, If your single and claim no dependents, you don't pay taxes if you make less than $16,000 or $13,000, I'm not sure. But you don't have to file for only four years, after that you have to file, even if you don't owe.

            Let me guess, the reason they have a 16,000 or 13,000, (whatever) minimum earnings is because the IRS is too lazy to collect it from all those people...LOL  OK......

            The 600 thing is just like the 16,000 thing, but in a smaller scale.

              chefgaryl's avatar - Lottery-063.jpg
              bristol pa
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              February 28, 2006
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              Posted: June 5, 2007, 2:22 pm - IP Logged

              Well I would have to imagine that anybody in thier right mind would just keep the ticket or tickets, but in my case the way my luck has been going I probably get arrested for stealing the damn thing!!!!!!

                LuckyLilly's avatar - savy chick.png

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                Posted: June 5, 2007, 2:25 pm - IP Logged

                No, the reason they don't collect taxes on people with incomes under 13k or 16k or whatever is because those people are low income.  Once you hit an income where you are deemed able to pay taxes, then the IRS wants payment on everything you earn and win whether from a job or thru gambling or sweepstakes or contest giveaways.

                The IRS does want part of all the smaller wins, but they have to rely on the taxpayers honesty to get it. 

                  four4me's avatar - gate1
                  MD
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                  Posted: June 5, 2007, 2:31 pm - IP Logged

                  Yes the simple fact is unearned income small prizes etc. are taxable but most don't report it.  

                  Big John says. You don't hit the number. The number hits you!!!!

                                 I'm not Big John, I'm Four4me, Big John's a friend.
                    justxploring's avatar - villiarna
                    Wandering Aimlessly
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                    Posted: June 5, 2007, 2:40 pm - IP Logged

                    As far as t-shirts and CDs, they are not currency.

                    Okay, whatever.  You win, Pac.   I need to get back to work.  If a company gives you a bonus in cash or sends you on a trip to the Bahamas, it's still taxable.  I've won furniture, trips and other items in sales contests and was taxed on all of them.  You can't just give someone a house or car either.  You need to follow the Gift Tax laws. They don't only apply to money.

                    You don't think that the people who win prizes on Wheel of Fortune or Price is Right pay taxes if they win cars?  Wrong!  Nobody is going to care if you win a lousy umbrella or a CD, Pac.  Nothing under $600 is reported anyway. The IRS realizes people don't report small prizes and of course the smart thing to do is to always buy separate lottery tickets, just in case you win.  Even if you're asked to sign the back of a ticket, unless you need to show a picture ID just scribble Arkady Svidrigailov. 

                    But I'm sticking to what I initially wrote. Technically all income and prizes are taxable if you fall into a taxable income bracket, or are you now saying Bankrate is wrong too?  ...Later

                      justxploring's avatar - villiarna
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                      Posted: June 5, 2007, 2:50 pm - IP Logged

                        "If your single and claim no dependents, you don't pay taxes if you make less than $16,000 or $13,000,"

                      Wrong again!  When was the last time you filed a tax return, Kiddo?  Look in the instructions that came with your 1040A or 1040EZ form.  "If your filing status is single and at the end of 2006 you were under 65 years of age, then you must file a return if your gross income was at least $8,450."

                       

                        chefgaryl's avatar - Lottery-063.jpg
                        bristol pa
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                        Posted: June 5, 2007, 3:40 pm - IP Logged

                        If your in my state you have to pay taxes if you have a winning ticket of a dollar like on the big4  which it still does not matter because even if u get 50 cent tickets which still pays 2500 u still have to sign those pretty pink and yellow sheets. They give u 50 cent tickets so the retailer can cash them. If you have 1.00 tickets which pays 5000 for the big 4 it sometimes really hard to cash because the retailer may  not have that much cash on hand!!!!!!!!!

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                          Kentucky
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                          Posted: June 5, 2007, 4:06 pm - IP Logged

                          Pac, I am sure about reporting wages from personal experience, but I never won enough gambling to report it.  The IRS rules & regulations and confusing, but here is an article from Bankrate.com I found that might help (or not!)  One paragraph states:

                          When you have to report it
                          Even if you didn't win enough to trigger W-2G filing, you do want to be a diligent taxpayer and report those gambling winnings, right? The casino, track or lottery agent might not have reported that $25 you won, but it's still taxable income. It's ultimately the taxpayer's responsibility to tell Uncle Sam about his good fortune.

                          http://www.bankrate.com/brm/itax/tips/20010131a.asp

                          So when I said "yes, it's tax evasion" I certainly wasn't suggesting to report the lousy $80  bucks someone wins for a 3/6 prize or even the $500 for Cash-3.  I was only stating what is our responsibility as good citizens of the USA so they can spend another trillion or so on a foreign country that hates us.

                          If lottery winnings under $600 are taxible, the lotteries would require you to fill out a W-2G; they don't. They fill out a W-2G for winnings over $599 but don't withhold any taxes if the winnings are under $5001. Winnings on table games in casinos seem to be tax exempt because they don't give you a W-2G there either. I'm far from a tax expert but there are many exceptions for gambling winnings; if you don't get a W-2G, don't worry about it.

                          However regardless if you do or do not get a W-2G, all bribes are taxible income and must be reported. :)

                            jarasan's avatar - new patrick.gif
                            Harbinger
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                            Posted: June 5, 2007, 4:15 pm - IP Logged

                            Ok. I gotta chime in on this one.  The IRS doesn't nickel and dime, they don't care.  It is too time consuming for them to go after the little ones.  Remember, the majority of taxes paid to the IRS comes from business and the top 10% of income earners I am talking like 90% of the collected taxes comes from the top income brackets.

                            Any money that you make and keep in your mattress unreported, is just that, in your mattress. They only know about it if you bank it and earn interest on it.  I have a close friend who hit 6 times last year for 20 tickets at $500 each, do the math $60K, he is on disability, anytime he hits he drives around all day from store to store collecting $500 until he is done. Needless to say he has a working bank to play with at his home.  If he banks it at a real bank they'll send him 1099-int and he'll pay taxes, but be careful any cash deposit greater that $9,999.00 is reported (drugs ,laundering).

                            Filing is a must but no one has to be paranoid unless you are committing theft, fraud, money laundering, etc. When I get those pesky 1099-Gs I just deduct up to the winning amounts, never had an audit.  As a matter of fact I only know of one person who was audited and closed down because they weren't depositing witholding.  But it is about as rare as hitting the lottery to get audited if you make less than $50K.

                              justxploring's avatar - villiarna
                              Wandering Aimlessly
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                              Posted: June 5, 2007, 4:51 pm - IP Logged

                              “Your federal government needs your money so that it can perform vital services for you that you would not think up yourself in a million years”.  Dave Barry  LOL

                                 
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