The Treasury Inspector General for Tax Administration revealed in a new report that 148,908 individuals who received Forms W-2G for $15,000 or more did not file a tax return, accounting for approximately $13.2 billion in unreported gambling winnings.
The report highlights how the lack of communication from the IRS has contributed to non-filing, with about two-thirds of individuals who did not submit tax returns not being notified of non-compliance, thus raising concerns about tax revenue from gambling.
To address these issues, recommendations include starting enforcement actions for non-filers from 2018-2020, analyzing Tax Identification Numbers for potential noncompliance, and expanding wager codes to encompass sports betting.
While the IRS has agreed to some recommendations, it disagreed with the need to analyze missing TINs, raising questions about the effectiveness of oversight in the burgeoning sports betting sector.
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