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The IRS Could Collect Over a Billion Dollars in Taxes From Unreported Wagering Income

Report Information

Date Issued
Report Number
2024-300-064
Report Type
Audit
Joint Report
Yes
Participating OIG
Treasury Inspector General for Tax Administration
Agency Wide
Yes (agency-wide)
Questioned Costs
$0
Funds for Better Use
$0
View Report

Recommendations

Begin appropriate enforcement actions, starting with notice issuance, on the population of nonfilers with gambling winnings for TYs 2018 through 2020, prioritizing high-income nonfilers, including the top 100 nonfiler cases identified by TIGTA.

Review the population of nonfilers with gambling winnings for TYs 2018 through 2020 that were not identified by the IMF CCNIP and begin appropriate enforcement actions as warranted.

The Commissioner, SB/SE Division, should analyze Forms W-2G with missing TINs to determine what forms of wagering and/or gambling institutions may be noncompliant. If the cases identified are related to another IRS division, share the results with that division. The results of this analysis should be shared with Exam Case Selection and influence future taxpayer outreach.

The Commissioner, SB/SE Division, should expand the wager codes to specifically include sports betting and use the wager code as a tool to identify potential noncompliance of excise taxes.

The Commissioner, SB/SE Division, should conduct an environment scan of the current and potential future conditions of the sports betting and online gambling industries, the industries’ risks, and the impact on tax compliance, and develop a process to identify and address Form 730 nonfilers and underreporter noncompliance.