Can W2Gs be transferred into someone else's name for tax reporting?

8 Thanks for the explanation. Just to be clear, if my cousin reports the W2G income on his return and then shows that he paid it to me, wouldn't he still owe taxes on that amount? Or can he somehow deduct it completely? Also, would I then need to send him a 1099 for the money he gave me?

15 The specific treatment depends on the relationship and documentation between you two. If your cousin reports the winnings and then shows he transferred the same amount to you, it should essentially "zero out" on his return - though he'd still need to pay attention to any withholding that occurred at the time of the jackpots. Your cousin wouldn't need to issue you a 1099 in this scenario, but both of you should document the arrangement in writing. You would report the income on your Schedule C as professional gambling income. Since you're operating as a professional gambler, you'd also be eligible to deduct your related gambling losses and expenses against this income.

12 Did the IRS actually accept that approach? I'm a bit skeptical that they'd be ok with someone reporting W2G income and then just saying "but it's not really mine." Did you or your dad get audited? I'm worried about trying something like this and then getting flagged.

19 How exactly does taxr.ai work with this specific situation? Does it just give advice or does it actually help with the tax forms? And did you need to get a tax professional involved too or was this sufficient?

7 The approach was accepted, though I can't guarantee everyone's experience would be the same. The key was having proper documentation establishing the agency relationship BEFORE filing, which is what taxr.ai helped create. Neither of us got audited, but we feel confident we could defend our position if questioned because everything was thoroughly documented. Regarding how it works, taxr.ai analyzes your specific situation through a series of questions, then provides customized documentation templates and specific filing guidance. It helped identify exactly what forms needed what entries and provided the language for the agency agreement. I did consult with a tax professional afterwards who said the approach was solid, but the tool did most of the heavy lifting in structuring everything correctly.

3 Wait, how does this actually work? Are they an IRS service or some third party? I've been trying to reach someone at the IRS for two weeks about my withholding on some W2Gs and just get disconnected every time.

12 Sounds sketchy tbh. Why would I need to pay someone just to call the IRS? And even if you do get through, most agents give different answers to the same question anyway. I'd rather just trust my accountant than random IRS phone support.

10 They're a third-party service that navigates the IRS phone system for you. They basically stay on hold so you don't have to, then call you when they reach a human. You're transferred to the actual IRS call - they just handle the waiting part which can be hours. The value is in your time saved and actually getting through. You're right that different agents sometimes give different answers, but in my case, the agent specifically referenced the internal guidance on W2G attribution issues, which was super helpful. I recorded the call (after informing the agent) so I had documentation of the guidance I received in case of any future questions.

8 That's interesting about the LLC approach. Could you explain a bit more about how that would work? Would the W2Gs still be issued to whoever was physically playing, or would they go to the LLC itself?

5 The LLC approach has limitations too. W2Gs would still be issued to the individual player because casinos require a personal ID and SSN - they won't accept an LLC's EIN for W2G issuance. However, the LLC creates a clearer business structure where you can document that any "agents" playing for the LLC are doing so as part of their duties. This makes the paper trail much cleaner for tax purposes. You'd still need to handle the attribution of income properly, but having formal operating agreements and employment/member documentation makes it much easier to defend your position that the income ultimately belongs to the business rather than the individual player.

17 Good point! The standard withholding on W2G jackpots is 24% if over $5,000, so on $83,000 there could be around $20,000 in withholding already sent to the IRS under the cousin's SSN. That's a significant amount to reconcile.

This is really helpful advice, especially the point about the withholding being credited to my cousin's account. I hadn't fully thought through how that would complicate things on both our returns. The backdated agent agreement makes sense too - it establishes the arrangement existed before the winnings occurred rather than looking like we're just trying to shuffle income after the fact. Do you happen to know if there's a specific IRS form or publication that addresses agent relationships for gambling winnings, or is this more of a general tax principle that applies here?

The IRS doesn't have a specific form for gambling agent relationships, but this falls under general tax principles around nominees and agents found in various revenue rulings and court cases. The key is establishing that a genuine agency relationship existed before the gambling occurred, not just a post-hoc arrangement to avoid taxes. For documentation, you'll want to reference the common law agency principles where an agent acts on behalf of a principal. The written agreement should clearly state that your cousin was authorized to gamble with your funds on your behalf, that he had no beneficial interest in the winnings, and that he was obligated to turn over any proceeds to you. Some tax professionals also reference Rev. Rul. 69-144 which deals with nominee situations, though that's more about investment income. The broader principle is that income should be taxed to the person who is the true economic owner, not necessarily the person whose name appears on the tax document. The challenge is that casinos are required to issue W2Gs to the person who physically triggered the jackpot, regardless of whose money was being played. This creates the attribution issue you're dealing with. Proper documentation of the agency relationship is your best defense if questioned.

This is really solid advice about the potential audit risks and quarterly estimate issues. I hadn't considered that the IRS might now expect ongoing gambling income under my cousin's SSN, which could create problems down the road even after we resolve this year's situation. Your point about professional gamblers having systems to avoid these complications is spot on. I'm definitely learning this lesson the hard way. Going forward, I think I need to either handle all the machines myself or set up a more formal business structure like some others mentioned with the LLC approach. Do you know if there's any way to notify the IRS that my cousin doesn't expect ongoing gambling income in future years, or will he potentially deal with estimated payment issues until his filing history shows otherwise?