The Internal Revenue Service's Criminal Investigation division is targeting illegal activity tied to sports betting as the pro football season gets underway.
Between 2021 and 2023, IRS criminal investigators initiated over 100 investigations into illegal gambling totaling more than $178 million. Of those, 89 cases led to indictments, with a 96% conviction rate for prosecuted cases, and an average sentence was 23 months in prison for adjudicated cases.
Fun and games until you have to pay the piper
"Sports betting is all fun and games until funds are laundered and individuals fail to meet their tax obligations," said IRS Criminal Investigation Chief Jim Lee in a recent statement.
"As this year's football season kicks off, CI special agents are leaning on public-private partnerships and paying close attention to data gleaned from a variety of sources such as currency transaction reports and suspicious activity reports to Forms 8300 that indicate criminal activity like money laundering and tax evasion."
Major League illegal sports betting
In one case, IRS Criminal Investigation teamed up with FBI special agents to probe a longtime illegal gambling business based in the Chicago area that accepted wagers from around 1,000 gamblers on various sports, including Major League Baseball, college and professional basketball, and college and professional football.
Vincent Delgiudice, also known as "Uncle Mick," often made bets at casinos to cover his potential losses in case his customers won, according to IRS CI, and allegedly laundered his profits internationally through cashier's checks and cash investments in businesses.
He was sentenced in March 2022 to 18 months in jail and ordered to forfeit $3.6 million for money laundering and operating an illegal gambling business.
Always report any winnings!
Taxpayers involved in sports betting are required to report their winnings on their annual tax return using Form W-2G. The IRS also wants individuals to keep detailed records of all their gambling transactions, including bets placed, winnings received, and losses incurred.
Just be aware that any winnings must be reported, and the IRS is getting very fine-tuned in their searches and investigations with the help of AI. Failure to report your winnings puts them in the category of illegal sports betting and it will only be a matter of time before you find yourself in the IRS's crosshairs.
If you have any sports betting issues that need resolving, you can contact me by one of the methods below in the blue box, or email me at Larry@TaxProblemSolver.com and we can review your specific situation and take care of it for you. You can also click here to book a free consultation. My team and I are always here for any of your tax resolution matters.
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