PART III - Vegas winnings - getting that refund back - david ingram expert cross border non-resident income tax help and prepara

David
 
I found this interesting, but not correct. There is a company that will get back your winnings for you called RMS Refunds. Their # is 1-888-272-5559. They keep 25%, but that's better than nothing. You have to wait until the end of the year, and they file a tax return for you.I won $2300, the casino withheld  about $690 and I got back from RMS about $500. Better than nothing!
FXXXX 
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david ingram replies:
 
I am lost - What is wrong with my reply.  I have been getting refunds for people from 1969 to 1984 -- Did not get refunds from 1985 to 1995 because they were just not available when the US / Canada Income Tax treaty changed and have been getting them back again since Jan 1996 when the Treaty changed again.  RMS is relatively new to the business of getting US tax refunds.

However, if you are not providing Gambling lass reports to RMS, you should not get a refund. Filing for a full refund from the IRS if you did not lose an equivalent amount of money is / would be a criminal act.
 
I have stayed away from gambling returns as a business and havce just done them when someone fights their way in the door but received so many replies to this one that I guess we should add a branch.  Another reader wrote that RMS had done over 3,000 Gambling returns last year and that is a lot of business.


Many people do their own as the following shows.



Dear David,
 
Re gambling losses.
 
I have been a long time fan of yours... watched the Channel 4 program religiously.  I recommended my friends to use your services which they did and are grateful for your valued assistance.
I can assist you with the gambling loss issue.
You are slightly incorrect in your statement re: losses;
 
We have received over $6,000.00 back in one year... obtain our refunds every year with no problems or issues at all.
The IRS does not ask for proof of losses usually.  They have not asked for our Proof of losses in over 10 years.
We called Philadelphia IRS when we first started the process many years ago.
 
The NR1040 form is used of course... The amount a person is claiming is on one line,, ( I would have to look it up).. If the claim is for $4,000.00,, the losses line would have to be the exact amount, ie: $4,000.00. 
An ITIN (Individual Taxpayer Identification Number) also has to be applied for at the same time with the appropriate form sent in with the 1040 NR.. The only thing that is a pain is that the ITIN form MUST be notarized by a USA notary... not a Canadian notary... A visit to Blaine is necessary to one of the many notaries there...
If you need more details, please advise and I will send you the correct form numbers, line numbers for the 1040 NR;
 
We receive our refunds very quickly as we send your tax form in Dec. 31.. We usually have the money back within 3 to 4 weeks.
The 1040 NR is now sent to Dallas TX,  not Philadelphia.
 
Thank you David.
Kind regards,
DXXXX DXXXXXXX

david ingram replies:

I am not sure what you are saying that is any different from what i said.

If you do not have losses, you do not get a refund.

If you have losses, you can get a refund of up to 30% of the loss amount, no more.

The W-7 ITIN number can be notarized at the US Consulate or by any of a dozen US lawyers in Vancouver with the easiest being to take it to Bellingham to the actual Social Security Office along with the tax return.

Although the IRS does not ask for the proof of losses, accountants have been told by Mike Damasiewicz of the IRS in Washington that filing the return without proof of losses could result in criminal charges against the accountant if the losses were found to be fraudulent. This was in response to a batch of people who were out there filing US gambling returns for the refund when there were no losses..

And there were a significant number of Canadian accountants who were filing for refunds when there were no actual losses.

We do not advertise for the gambling business but do prepare over a 100 of them a year with no problems.

However, we make sure that they can prove their losses and send that documentation with the return.

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David,

But if I won 10k in Vegas and the IRS took 30% and 10K is all of my income as a non-resident.  Wouldn't the real tax-due be 0 after exemptions therefore giving me a 100% refund of the withholding tax? 

Vegas handed me a W2-G and it was considered 'Gambling Wages'.

Thanks!

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david ingram replies:

For non-residents, the 'ONLY' deduction against gambling winnings is a gambling loss.  Gambling winnings have a flat tax of 30%.

Therefore, if you win $10,000 and do not lose anything, the tax is $3,000 - no more - no less if you are a non-resident.

NON-residents do not get personal exemptions or a standard deduction against gambling winnings and the only itemized deduction they can take is a gambling loss.

david
  
OLDER QUESTION which prompted this.

US / Canada Income Tax Help - CEN-TAPEDE <centapede@lists.centa.com> wrote
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NOTE -- As well as the regular Sunday morning program on CHBD - www.600am.com

For the foreseeable future, I will also by guesting with Fred Snyder on CKNW every Sunday from 6 to 7 PM Vancouver time.  go to
www.centa.com to tune in on the Internet or dial in to 980 AM in the lower mainland of BC.
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Question

My gf had $4000 withheld in Vegas.  I understand we can get that back.

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david ingram replies:

The answer is yes, no,  maybe,  or part of it.
 
If it was just file a form to get it back, there would be no reason to deduct it in the first place.  The fact is that the US taxes non-residents 30% on windfalls and unless you can show losses, there is no refund. 
 
I do not gamble on any regular basis and when I do, I might drop $10.00 in the slots.  If I won $12,000 and the IRS took $3,600, I would not have any claim against the $3,600 because I had won $12,000 and the law says the IRS gets 30%.
 
On the other hand, If I went out and lost $10,000, I could get back $3,000 which would be 30% of the $10,000 lost. If i lost $5,000, I would get back $1,500 and so on.  To do this, i would have collected Gambling Loss reports from the Casinos as i lost the money r I would have my 'convenience' card which would track my wins and losses. 

We can do this for you if your lady friend lost money as well as the big win.  If all she did was win and you did not lose anything, the IRS gets to keep it all. Our minimum charge would be $300.00 with $450 more likely and it could be more if there are a lot of gambling loss reports.

We need your gambling loss reports as well -- Add $100 if you do not have a US ITIN already.

---------- 

this older Q & A will help.


Hi, my husband won 1,250.00 at the Tulalip Casino on April 14, 2007.  He Was given form 1042-S showing the 30% withholding tax of 375.00.  We are trying to determine how we can receive those monies back. 
 
I sent in a W-7 Application of IRS Individual Taxpayer Identification Number on April 18th, 2007 to obtain the identification number. 
 
Am I correct, that I have to get this id number before filling out the 1040NR Income Tax Return form?
Also do I fill out the 2006 1040NR form or wait until the 2007 forms are available as that is the year the monies were won and the tax taken off.
 
Also which lines do I put the winnings and the tax amount withheld. 
 
Any advise would be greatly appreciated.  Thank You for your time.
Could you please email me at cccccccc
 
Thanks again.
 
when life hands you Lemons, ask for tequila and salt
 
Be ALERT, the world needs more 'lerts'.
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david ingram replies:
This came to a personal email which i do not look at very often. Even then only 1 or 2% do get answered.  This is very late but will answer your inquiry.
 
Sirs

 
Do you provide a service to recoup the 30% withholding tax from the IRS.
If so what are your charges to do the work in total or to provide some advice to overcome the pitfalls (ie Article number of the Tax Treaty)
 
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david ingram replies:

WE CAN PROVIDE THAT SERVICE but The 30% tax is only recoverable if you have in fact lost money in your gambling. OLDER QUESTIONS FOLLOW

QUESTION:

I recently had taxes withheld on slot machine wins in Reno, NV.  I
understand, as a Canadian resident, that I can apply to have the taxes
refunded.  Do I have to wait until the calendar year ends to apply?
Thanks!
=============================================
david ingram replies:

You have to wait until 2008 for a 2007 refund but you have to have gambling
losses to offset gains to get a refund.

The following is the answer to an older question.

As a non US citizen, you must file a 1040NR along with a form W7 to get an
ITIN (Individual Taxpayer Identification Number).

The following is a previous answer given in January to someone who had
received a W2G for a win of $1,200.

We can help you.
===============
older answer

For non-residents of the United States, the withholding is 30% of wins of
$1,200 or more.  You would file a 1040NR to report the winnings and claim
your losses as itemized deductions.

Remember that reporting just your win of $2100 and claiming gambling losses
does not make sense.  If you won $2,100 (or any other amount) and lost that
much, there were more winnings in between which should be reported even if a
slip was not issued.

Non-residents do not usually get a W2-G - they are issued a 1042-S

david ingram

IRS TAX TIP 2004-33

GAMBLING INCOME AND EXPENSES


Hit a big one in 2008? With more and more gambling establishments, the IRS
reminds people that they must report all gambling winnings as income on
their tax return.

Gambling income includes, but is not limited to, winnings from lotteries,
raffles, horse and dog races and casinos, as well as the fair market value
of prizes such as cars, houses, trips or other non cash prizes.

Generally, if you receive $600 ($1,200 from bingo and slot machines and
$1,500 from keno) or more in gambling winnings, the payer is required to
issue you a Form W-2G. If you have won more than $5,000, the payer may be
required to withhold 27% of the proceeds for Federal income tax. However,
if you did not provide your Social Security number to the payer, the
amount withheld will be 30%.

The full amount of your gambling winnings for the year must be reported on
line 21, Form 1040 or the equivalent line on form 1040NR. If you itemize
deductions, you can deduct your
gambling losses for the year on line 27, Schedule A (Form 1040). You
cannot deduct gambling losses that are more than your winnings.

It is important to keep an accurate diary or similar record of your
gambling winnings and losses. To deduct your losses, you must be able to
provide receipts, tickets, statements or other records that show the
amount of both your winnings and losses.

For more information on record keeping, see IRS Publication 529,
"Miscellaneous Deductions," or Publication 525, "Taxable and Non-taxable
Income." You may also want to check out Form W-2G or Form 1042-S and its
instructions and
Tax Topic 419, "Gambling Income and expenses." All are available on the
IRS Web site at
www.irs.gov. You may also order free publications and
forms by calling toll free 1-800-TAX-FORM (1-800-829-3676).
--------------------------------------------



Answers to this and other similar  questions can be obtained free on Air
every Sunday morning.

Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Cartier
Partners and I will be hosting an INFOMERCIAL but LIVE talk show called "ITS
YOUR MONEY"

Those outside of the Lower Mainland will be able to listen on the Internet
at

www.600AM.com

Local phone calls to (604) 280-0600 - Long distance calls to 1-866-778-0600.

Old shows are archived at the site.




SUGGESTED PRICE GUIDELINES - May 17, 2008

david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
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My Home office is at:
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Calls welcomed from 10 AM to 9 PM 7 days a week  Vancouver (LA) time -  (please do not fax or phone outside of those hours as this is a home office) expert  US Canada Canadian American  Mexican Income Tax  service help.
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Phone consultations are $450 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or is to be returned to Canada or a phone consultation is in Canada. ($472.50 with GST for in person or if you are on the telephone in Canada) expert  US Canada Canadian American  Mexican Income Tax  service and help.
This is not intended to be definitive but in general I am quoting $900 to $3,000 for a dual country tax return.

$900 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only (but were filing both countries) - no self employment or rentals or capital gains - you did not move into or out of the country in this year.
 
$1,200 would be the same with one rental
 
$1,300 would be the same with one business no rental
 
$1,300 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes.
 
$1,600 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits  no move in or out

$1,700 would be for two people with income from two countries

$3,000 would be all of the above and you moved in and out of the country.
 
This is just a guideline for US / Canadian returns
 
We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $200.00 up. However, if you have a stack of 1099, or T3 or T4A or T5 or K1 reporting forms, expect to pay an average of $10.00 each with up to $50.00 for a K1 or T5013 or T5008 or T101 --- Income trusts with amounts in box 42 are an even larger problem and will be more expensive. - i.e. 20 information slips will be at least $350.00
 
With a Rental for $400, two or three rentals for $550 to $700 (i.e. $150 per rental) First year Rental - plus $250.
 
A Business for $400 - Rental and business likely $550 to $700
 
And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return.
 
Moving in or out of the country or part year earnings in the US will ALWAYS be $900 and up.
 
TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return.
 
8891 forms are generally $50.00 to $100.00 each.
 
18 RRSPs would be $900.00 - (maybe amalgamate a couple)
 
Capital gains *sales)  are likely $50.00 for the first and $20.00 each after that.

Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable.  In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years.  We have done several catch-ups where the client has received as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund. 

Email and Faxed information is convenient for the sender but very time consuming and hard to keep track of when they come in multiple files.  As of May 1, 2008, we will charge or be charging a surcharge for information that comes in more than two files.  It can take us a valuable hour or more  to try and put together the file when someone sends 10 emails or 15 attachments, etc. We had one return with over 50 faxes and emails for instance. 

This is a guideline not etched in stone.  If you do your own TDF-90 forms, it is to your advantage. However, if we put them in the first year, the computer carries them forward beautifully.
 

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