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Articles Tagged with IRS

By Nathan Vinson, attorney
English, Lucas, Priest & Owsley, LLP

IRS taxes gambling

The IRS is considering changing the way it taxes gambling payouts.

Since 1977, the IRS has required those who won $1,200 or more from slot machines or $1,500 or more from Keno to report and pay taxes on those winnings. We wrote about this rule earlier this year as it pertains to horse racing, a subject near and dear to Kentucky hearts.

After nearly 40 years of this practice, the IRS is considering changing that limit to $600, and casino gaming operators aren’t pleased.

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By Nathan Vinson
Attorney, English, Lucas, Priest & Owsley, LLP

Tax season is behind us (ahh, it feels nice to type this…) but it’s never too early to remind folks what to look for in a tax preparer – particularly given the news out of the U.S. Department of Justice earlier this year.

2015-02-02 16.45.14The U.S. Department of Justice banned a Kentucky man from preparing tax returns for life after auditing several of his clients’ returns. He offered a service in which he would go to the home of a client and prepare their tax returns on the spot, but he filed fake deductions, including using his own relatives as dependents on their returns and falsifying letters from churches indicating that people had donated money that they had not. He is banned from preparing taxes for life, and rightly so. The Internal Revenue Service takes incidents like this very seriously and has taken a necessary step to help keep the tax preparation industry free of con artists.

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race ticket with cash
By Nathan Vinson
Attorney, English, Lucas, Priest & Owsley, LLP

Ah, spring in Kentucky. If you automatically think of horse racing when you read that statement, you’re not alone – lots of folks do. It’s a great pastime particularly beloved in the Bluegrass State.

This year, we’ve watched the rise of American Pharaoh as the horse that won the Kentucky Derby and Preakness. Next up is the Belmont Stakes, set for June 6 in Belmont Park, Elmont, New York. If American Pharaoh takes the Belmont Stakes, he will be the first Triple Crown winner since Affirmed in 1978. The allure of picking a Triple Crown winner often draws a lot of interest from long-time gamblers and novices alike, so we thought we’d review with you what happens if you do, indeed, win big at the track.

If you are clutching that winning ticket as your pony crosses the finish line, it’s a safe bet that the government wants a cut of those winnings.

There are two ways to win at the track: (1) bet on a horse or (2) own a horse. The government is only interested in knowing about your win as a gambler if you win $600 or more, and if your winnings are at least 300 times your wager (e.g. winning $600 on a $2 bet). Of course, all winnings, no matter what the amount, are taxable.

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