Can foreign tourists winning at US casinos be taxed? Tax obligations for visa holders with gambling winnings

But how would they even track this if the tourist just goes back to their country? And what if they won smaller amounts at different casinos that didn't require reporting? Also would they need an ITIN number to file that 1040-NR form you mentioned?

The casinos are required to get identification before paying out substantial winnings, which creates a paper trail. Many casinos now also track play using player cards, making it easier to monitor cumulative winnings. For smaller amounts below reporting thresholds, it becomes more challenging for the IRS to track, but legally the tourist still owes taxes on those winnings. Yes, they would need to apply for an ITIN (Individual Taxpayer Identification Number) to file a 1040-NR if they don't already have a Social Security Number.

Does it work for other types of foreign income too? Like if I have rental income from another country but live in the US now?

Sounds interesting but can it actually help if the person already left the US without paying those taxes? Like if they've been gone for months, is it too late to straighten things out?

It absolutely works for other types of foreign income. The service has specialists who understand international tax agreements and can help identify which forms you need for reporting foreign rental income while living in the US. Yes, it can definitely help even if someone has already left the US without addressing their tax obligations. They have experts who can guide you through the process of late filing and explain the potential penalties or amnesty programs available. It's rarely too late to get tax situations straightened out.

How exactly does this service work? Seems kinda sketchy that they can somehow get through when no one else can. Do they have some special connection with the IRS?

Yeah right. The IRS doesn't answer their phones for anybody. I've tried calling for months about a much simpler issue. No way they got you through in 20 minutes.

The service works by using an automated system that continuously redials the IRS until it gets through, then it calls you when it has an agent on the line. It's basically doing the waiting for you instead of you having to sit on hold for hours. There's no special connection with the IRS - they're just using technology to navigate the phone system more efficiently than a human could. They got me through in about 17 minutes on a Tuesday morning, but times vary depending on call volume and which department you need to reach.

Doesn't Canada have a tax treaty with the US that reduces the withholding? I think it's supposed to be 15% not 30%. You might be able to get some money back if you file properly.

You're absolutely right about the tax treaty. I didn't know that at the time, and the casino staff didn't mention anything about reduced rates for Canadians. I just looked into it, and it seems I could still file to get back the difference between the 30% they withheld and the 15% treaty rate. Thanks for pointing this out - definitely going to look into filing for that refund now!

This is true! My brother visits from Mexico every year and plays a lot of poker and blackjack. He's won several thousand multiple times but has never had withholding because of how he won. Slot machine jackpots get reported right away though.

This is really helpful information about the different reporting thresholds! I'm new to understanding all these tax rules, but it sounds like the type of game makes a huge difference in whether there's automatic reporting. So if someone is playing table games and gradually building up their winnings rather than hitting one big jackpot, they might fly under the radar initially - but they're still supposed to report it themselves? That seems like it would be really easy to overlook or "forget" about, especially for tourists who might not even know they have this obligation. Do you know if there are any penalties specifically for foreign tourists who don't report gambling winnings?

Great question about penalties! The IRS generally treats unreported gambling income the same whether you're a tourist or resident. If they discover unreported winnings, you could face accuracy-related penalties (20% of the underpayment), failure-to-file penalties if no return was filed, plus interest on any taxes owed. However, tourists have a bit more complexity because they might qualify for the "reasonable cause" exception if they genuinely didn't know about the reporting requirement. The IRS sometimes shows leniency for first-time filers who can demonstrate they were unaware of their obligations. That said, with $20,000 in winnings spread across multiple casinos, it would be hard to argue complete ignorance, especially since at least some of those wins likely triggered automatic reporting. The bigger risk is that while enforcement might be limited initially, the IRS has no statute of limitations on unfiled returns - so this could potentially come back years later with accumulated penalties and interest.

This is really insightful from someone who actually works in the industry! I had no idea that casinos were starting to collect passport information for smaller wins too. That definitely changes the game in terms of creating paper trails. Your point about being proactive makes a lot of sense - especially since it sounds like the enforcement can be unpredictable. Do you happen to know if there's a typical timeframe where tourists should file by, or is it just the standard tax year deadline? And when you mention they might get money back if too much was withheld, is that common for tourists to actually receive refunds?

Great questions! For filing deadlines, non-resident aliens typically need to file Form 1040NR by April 15th of the year following when they earned the income, just like US residents. However, they can request an automatic 6-month extension if needed. Regarding refunds, it's actually quite common for tourists to get money back! The standard 30% withholding is often more than what they actually owe, especially if their home country has a tax treaty with the US. For example, tourists from Canada might only owe 15% under the treaty, so they'd get back the difference. Even without treaties, many tourists end up in lower tax brackets than the 30% withholding rate assumes. The key is that you have to file to get any refund - the IRS won't automatically send overpaid taxes back. I've seen tourists recover anywhere from a few hundred to several thousand dollars by filing properly, so it's definitely worth the paperwork hassle in most cases.

This is excellent advice about keeping documentation! I'm just starting to learn about all these tax requirements and had no idea that international information sharing had gotten so much more sophisticated recently. That's definitely something to keep in mind for the future. Quick question - when you mention getting an ITIN taking several weeks, is that something that can be done from outside the US? Like if someone has already returned to their home country, can they still apply for an ITIN to file their US tax return properly?