LAS VEGAS-Atlantic City-Skagit Casino Gambling Winnings in USA by Canadian citizen not resident in US

QUESTION:

How do i collect the tax money retained by a casino in the USA.

david ingram replies:

I would need your statement that you had lost more money than you had won. In addition, you likely won other amounts of $100, $350, $600 on which tax was NOT withheld, so I need an amount of total winnings, not just the single win.

I would need a filled in W7 to go with the return. You can get the W7 form at:

http://www.irs.gov/pub/irs-fill/fw7.pdf

Following is a similar / same answer I gave someone else a couple of weeks ago. It will help you understand why.

QUESTION:

Received Form 1042-S which withheld $2,250 US (box 7) and $292.50 (box 22)
on $7,500 US (box 2)of gross GAMBLING WINNNGS. I have never tracked my
gambling losses and am a Canadian resident for tax purposes. I have no ITIN
nor SSN. Is there any means of recovering all or a portion of these tax
withholdings?
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david ingram replies

Gambling and lottery winnings are taxable in the United States for residents and visitors.

Small winnings are not recorded but amounts over $1,200 are and non-residents have 30% tax withheld.

Because of the taxing of winnings, the casinos are also very good at providing records of losses.

If you lose $2,000 at the tables, they know it and will provide you with a form called a Gambling Loss Report if asked.

If you have lost $100, $1,000 or $10,000 at the slots, you can ask the pit boss for a gambling loss report. Believe it or not, if you point out the slot or slots you were playing, they can punch a couple of buttons and print out a statement for your losses. I don't know how they do it either. Something to do with the touch and feel of the player I suppose.

I am not a gambler. In the last twenty years I have lost $10.00 at each of Boulder City Nevada, Las Vegas; Livingston, Montana; Fort Garry, Manitoba and Digby, Nova Scotia.

$10.00 is my limit. If I won $100,000 and they deducted $30,000, I could not get it back because I won $100,000 and they have the right to the 30% tax.

However, if I took the $70,000 left and promptly lost it AND got gambling loss reports to prove it, I could file a 1040NR and report my $100,000 in and $70,000 out and ask for a refund of $21,000 back (30% of $70,000).

If I borrowed $40,000 on my house and lost it as well (in the same calendar year) I could get the whole $30,000 back.

So the answer is that you have to file a 1040NR and a W7 with it to obtain a number. http://www.irs.gov/pub/irs-fill/fw7.pdf

If you do not have a gambling loss report but know you lost the money and can prove it with bank withdrawals, cheques cashed at the casino, etc., you can still file the return.

If you just won and did not lose the money or any part of it, do not file the return to ask for a refund. It would be a serious offence.