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state taxes on winnings Q

Topic closed. 21 replies. Last post 9 years ago by Littleoldlady.

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NY
United States
Member #23835
October 16, 2005
3474 Posts
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Posted: April 24, 2008, 3:13 am - IP Logged

Hummmmm ... something doesn't add up.  I have bought scratch offs from over the counter, from numerous states, and they did not scan the ticket. They just grab the quantity I bought, collected the money, and I walked away.  No record of what I bought or when I bought it. This applied in new Jersey, Texas, Oklahoma, New York, and Pennsylvania.   Therefore, for the purpose of scratch-offs, my position is valid.  The state have no idea of who bought what or when they were bought; only where it was bought.  Once again, the only revelant date reference is the expiration of the card. I could cash it in 30 days. I could cash it in 60 days. I could cash it 120 days.  No one would know.

For the purpose of residency, all I need is a lease agreement.  There are hundreds of those forms on the internet, or one could create one in ten minutes of semi-creative thinking.  Who would I have a lease with?  My brother could lease me a spare room for one day or one year, or ten years. It doesn't matter.  It happens all over the country.  I know, for a fact, my dad, had a lease with his borther, renting him the upstairs of a duplex.  The date of that lease if the legal date of residency.  There is no law requiring a drivers license, if you don't drive.  A state ID is a convenience, not a requirement.  Not in Oklahoma any way.  Therefore, with a back-dated lease, from my brother, I could be a resident of Oklahoma six weeks ago.  I currently have tickets from Oklahoma for Powerball.  Guaranteed, if I hit their $125M jackpot tonight, then the test will begin.

After all, tax evaders rarely go directly to jail.  With a few hundred million, I could afford to plea-bargain.  That sort of activity, especially from the rich and famous, or just plain rich, is done every day. They are caught with illegal guns and walk away.  They are caught drunk and walk away. They are caught completely stoned and walk away. They are caught evading taxes and walk away. Happens every day.  It is the luck of being able to afford good lawyers instead of fast-Freddie on the corner lot.  The most I would have to pay is the taxes and a penalty.  Instead of immediately loosing four or five million to a state, I'd take the chance.  I could save, say, six million, or pay six million, plus another million in penalties.  Those are execellent odds.

You're fairly thoroughly delusional about how it works. Just as you don't need a driver's license if you don't drive, you don't need to use a house or apartment as your permanent residence. Owning a dwelling in the state you claim to have moved to will be useful, but other factors may be considered, too. Claiming to rent from a relative will have almost no meaning at all without some other evidence to back it up. You can certainly back date a fraudulent lease agreement, but you're going to have a great deal of trouble getting the banks to create a phony trail of cancelled rent checks. Sure, you can pay cash, but you have no proof if you've paid cash. There's also the matter of where you were really living. Since you were really living there, there's a pretty good chance that there is a paper trail to prove that. Utilities in your  name or the name of your spouse? You lived there. Rent or mortgage checks? Ditto. Using credit cards in the area on a regular basis? Then there's the driver's license thing. If you do drive, then you presumably have a license in the state you really live in.  If you really moved, why do you still have it? Own a car or a boat?

The fact of the matter is that states go after people who have claimed to move all the time. Some times the people are really living elsewhere, but  where you're staying and where your residence is aren't always the same thing. Computers are very powerful tools, and it's a safe bet that if you filed a tax return last year and don't file one this year it's going to be noticed. If your income last year was small the state will probably consider you a low priority, but there's a good chance they'll look a bit more closely to find out why you didn't file. I wouldn't be at all surprised if they check records of jackpot winners, at least in adjoining states, against missing returns or returns that claim a change of residence during the year. About the only thing that might help would be if you claim to have moved to a state with a higher, or  very similar tax rate. Of course if that state doesn't tax its own lottery prizes your old state is going to know that.

Sure, there's always a chance that you'll get away with it, but you're seriously underestimating the risk. You're not lying about a few hundred or a few grand in unreported income, and there's a good chance you'll be caught. The penalties can include the cost of the investigation, interest on the unpaid amount, and fines, as well as years of jail time. If you think that the rich always avoid jail because they have good lawyers, think about how much a good lawyer costs, and add that to the other penalties. Then you can ask Paris Hilton, Martha Stewart, Michael Milken and a host of other rich and famous people what happens  when you have good lawyers, but you're actually guilty.

Finally, you're confused about how plea bargaining works. Plea bargaining is for cases where neither side is sure they can prove their case. The amount of money involved will be a slam dunk, and if you haven't really moved that state will probably have no problem proving it. For people who owe a few hundred or a few thousand where the proof isn't easy the state will often be happy to get half of what they think they're owed. When the amount is millions of dollars and they have a strong case they might decide to make an example of you, and at the very least they're going to want every penny, including the interest and fines. The best you'll be offered is the chance to stay out of jail if you write the check as soon as they ask for it.

    DC81's avatar - batman39
    MI
    United States
    Member #54830
    August 31, 2007
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    Posted: April 24, 2008, 5:07 am - IP Logged

    Why so much concern over state income taxes anyway? The ones you really should be concerned about are the Federal first and foremost, then maybe the state.. If it's a big win move to a state with no income tax to help potentially reduce it the next year. That way you'll only have to pay that once unlike the Federal.

    You can't predict random.

      time*treat's avatar - radar

      United States
      Member #13130
      March 30, 2005
      2171 Posts
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      Posted: April 24, 2008, 5:53 am - IP Logged

      Why so much concern over state income taxes anyway? The ones you really should be concerned about are the Federal first and foremost, then maybe the state.. If it's a big win move to a state with no income tax to help potentially reduce it the next year. That way you'll only have to pay that once unlike the Federal.

      It depends on where people live. My state has a flat income tax. Some states get up to 8%-9%. I once lived in a state where there were income taxes at state, county and city levelsScared. Adding federal, that's 4 filings. I didn't live there long. Leaving

      In neo-conned Amerika, bank robs you.
      Alcohol, Tobacco, and Firearms should be the name of a convenience store, not a govnoment agency.

        DC81's avatar - batman39
        MI
        United States
        Member #54830
        August 31, 2007
        985 Posts
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        Posted: April 24, 2008, 8:33 am - IP Logged

        Yeah, didn't factor in the potential for county and city income taxes, I wouldn't live there long either.Puke

        You can't predict random.

          Coin Toss's avatar - shape barbed.jpg
          Zeta Reticuli Star System
          United States
          Member #30470
          January 17, 2006
          10351 Posts
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          Posted: April 24, 2008, 10:23 am - IP Logged

          Another interesting thread.

          Despite the "Once upon a time Jetrho hit a jackpot, moved to another state, and beat the other state out of a few million in taxes", let's see:

          Would anyone who hit a jackpot try such a move?

          Probably, someone out there.

          Would they regret it afterwards, having exchanged the taxes for lawyers' fees, and then having to cough up the taxes, too?

          Even more probably.

          I just can't wait for the thread about an American hitting a jackpot and moving to Canada because it's not taxed.

          Once upon a time....

          Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

          Lep

          There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.


            United States
            Member #59167
            March 8, 2008
            174 Posts
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            Posted: April 24, 2008, 6:21 pm - IP Logged

            Each book of tickets are activated before sold.  The dates of activation would indicate the time period to when the ticket was bought.  Winners before or after the tickets bought would indicate the time the ticket was cashed in.

             

            If you bought five tickets and I bought the five after you.  If you won a million,  and I won only a ticket.  When I collected my ticket the ticket you bought was then registered as being bought before mine.

            As I stated during my last post, the purchased date has absolute zero effect on the out come.  All I need is a lease dated before the date on the winning draw slip or scratch-off card.  Easily done with a pre-dated lease of a bedroom from a relative, friend, or stranger.  I can name hundreds of people who would sign a pre-dated lease for a hundred thousand dollars.  Walk down any street in down town Philadelphia and see how much it would cost to have some one killed.  TV reporting puts a human life at less then a thousand dollars. Sign a lease for a hundred thousand?  The line would be around the block! Show me a college kid and I'll show you some one who would jump hoops for a dollar!

            Remember, we're discussing state level tax auditors, not the federal IRS. Extremely difficult to beat the IRS. Ask Wesley Snipes!

              Littleoldlady's avatar - basket
              Clarksville
              United States
              Member #487
              July 15, 2002
              17638 Posts
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              Posted: April 26, 2008, 12:36 pm - IP Logged

              In the first place before you even get the money, the feds will have theirs and so will the state.  So don't move..just stay there, collect your losing tickets and try to get some of it back.

              If you know your number is going to hit, have patience and then KILL IT!

              You never know when you will get another hit.