Voodoo

I put together a quick but wordy guide for fellow members that are heading to the US for the WSOP and other tournaments. Should you cash in a tournament and have taxes withheld this will help you get some if not all of your money back. I have simplified this as much as possible and have filed returns not only for myself but many others as well without incident so use this if you'd like and if you have any questions feel free to PM or post them.

Cheers.


This is a quick guide to filing a US Federal Return to recover any or all of your withheld taxed winnings.

First off if this is your first time filing a US Federal Return as a Canadian you will need to file along with your return a W-7 (Application for IRS Individual Taxpayer Identification Number or ITIN).

You can download a W-7 Form here http://www.irs.gov/pub/irs-pdf/fw7.pdf

This form is self explanatory and easy to fill in, under the Reason you are submitting Form W-7 section just tick off the (a) Nonresident alien required to obtain ITIN to claim tax treaty benefit box.

Next fill out the Name/Address/Birth Information/Sign Here Sections.

That is all the information you will need for your W-7 Application.

Step 2

Step 2 has changed, Ill try and post a simply version later. Feel free to PM me and I'll try and help out.

You will now need to submit Identification (supporting Documentation) Other then submitting an original valid passport or a notarized/certified copy of one, you will need to get a copy of your birth certificate and driver’s license (or another picture ID) notarized. Any original documents you send will be returned to you (you do not need to provide a return envelope)

Now you are DONE. The final step is to mail and file your return with the U.S and you can do so by mailing it to the following address.

Internal Revenue Services
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342

If you are using a private delivery service (example FedEx) you can submit all documents to:

Internal Revenue Service
Submission Processing Center
ITIN Operation
Mail Stop 6090-AUSC
3651 S. Interregional, HWY 35
Austin, TX 78741-0000


Hope this helps a few of you this year after you cash in the WSOP or other tournaments. If you need any help or would like my services (as I do this as part of my occupation) please feel free to drop me a PM.

SteveKerr

thanks Voodoo,
One question, The 15k or $15,000 in your example is this the total before they take 30%

__________________
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http://www.orangevillepokertour.com

Voodoo

Total before withholding

Graham

Great post Voodoo, I am sure many people will find this information very useful.

Voodoo

No prob Graham. I think I promised you this like months ago, but finally got it done.

I can't stress enough to people about dropping by the sportsbooks and grabbing old losing tickets. At some of the bigger books you'll sometimes find some huge losing tickets on Saturdays/Sundays. Those help bring that total down greatly.

compuease

I asked Voodoo a couple of questions that he graciously provided answers for and I thought maybe the info would be of value to others.

Question: if someone did have a big win, where 100K or so is withheld, would you need 100K in expenses to get it all back? That's a lot of tickets to pick up....

Answer: Quick answer would be yes. You'd actually need like 300K in expenses to get back the 100k as you need to reduce you net income down to zero. At that point I would usually tell someone that has had a big win to plan a trip back to Vegas during the NFL season. At the bigger sportsbooks you will easily find 50K worth of tickets from NCAA and NFL each day.

Question: Wouldn't they be rather suspicious though that you submitted 300K of sportsbook losses without showing any wins from sports betting? Sure would make me suspicious of where the tickets came from.

Answer: Yeah I would never advise a client to claim that much myself, the thing with sportsbetting though is that unless you are cashing huge tickets you never really get a W-2 or a 1042-S form for withheld taxes. But given the example of say 300k I would say plan 3-4 trips to vegas have some fun and bring back about 130-150 in losing tickets to offset the 300K then if you get get back 50-60% of your withheld taxes your golden.

BlondeFish

Thanks a lot. Filling out IRS tax forms will probably continue to be at the bottom of my to-do list and I will never get back any of the 30% withheld by Seneca or other US casino, but hopefully forumers will have a Sportsbook Crawl after their WSOP events!

__________________
May your EV always be positive.

compuease

Why not ask Voodoo to do it then? When you're in Vegas visit a few sportsbooks and collect.. Maybe we should all do that and pool our resources...

Voodoo

Buddy, why do you assume you can't get any of your Seneca money back? As long as you have your 1042-S forms they gave you it shouldn't be a problem. I think the greatest obstacle we face as Canadians is that we look at these IRS forms and its seems all greek to us when it really shouldn't be. Let me know if you need help and we'll talk.

pokerJAH

I guess cash game losses would not qualify? could you buy chips from the poker cage (ask for a receipt) and then cash out for a lower amount and claim it as a loss (keep some chips for later, etc.)?

Voodoo

Unfortunately they don't, if they did every person in a situation where monies were withheld would be hitting up casino cages and buyin chips with credit cards etc and asking for receipts. Sometimes its best to stay out of grey areas.

blackmagicz

I hope I have this problem this year

Mathers

Lying to the IRS is at the bottom of my to-do list. Good advice for anyone who wants to try it though. See you in 10 to 20.

NickdaNutz

Voodoo,

Thanks for your informative guide. It even helped me to discover this new forum. I have a few issues questions. The first point is that your second link seems to lead to the W-7 form. I assume that the 1040NR form that we need to fill in is:

http://www.irs.gov/pub/irs-pdf/f1040nr.pdf



I was lucky/good enough to chop a tournament at the Venetian for a total of 46,056 of which 13,493 was withheld for taxes. Im slightly confused by the 1040NR. Do I have to get my deductions up to my gross income in order to get any money back? This is what it seems from the form. I'm kinda lost here. I thought that, as Canadians, we are able to claim all of it back. Any help would be much appreciated.

Gogie

From the IRS' perspective the $46K you won is income earned in the U.S.. They withheld $13.5K as tax on that income. The onus is now on you to file a U.S. income tax return if you want to try to recover some (or all) of the tax they withheld. As in most other countries, you can offset your income with certain allowable deductions. In your case the only deductions you'll probably be able to make would be gambling losses and, possibly, some expenses related to your gambling winnings (travel, accommodations, etc.). If you can show gambling losses and expenses equal to or greater than your gambling winnings (and that technically includes all gambling winnings you had in the U.S., not just those for which tax was withheld) than you will get all of the withholding taxes back. If your deductions are less than your gambling income, than you'll only get back some, not all, of the withholding tax.

You can use one of the Canadian services that get withholding taxes back for Canadians but they will basically be doing what I've outlined above (been there, done that and made sure I got copies of all the U.S. tax filings made on my behalf so I know what they do). In reality there's no magic solution - you need to show losses/deductions to offset income in order to claim a tax refund.