fox and associates, inc.
Non-Resident Professional Gamblers F.A.Q. *
Non-Resident Professional Gamblers F.A.Q. *
1) I'm a non U.S. Citizen who cashed in a US Event. 30% Federal Withholding was taken out of my winnings and a 1042-S was issued. How can I get my money back?
Individuals from certain countries may have taxes taken out by the US based casino AUTOMATICALLY. The casino is obligated to withhold up to 30%. In many cases, SOME of these winnings can be recouped.
If the individual is a “Professional Gambler”, a 1040NR (non-resident tax return) can be submitted. This return will offset expenses and other gambling losses from the same calendar year played in the U.S. Unfortunately, a person may not receive a full refund of all the withholdings. With an experienced tax preparer, they may be able to recoup a portion that was withheld. Individuals must apply for a TIN# (taxpayer identification number) with IRS before a return can be submitted.
2) Do I have to pay taxes to the US on my gambling winnings?
This is a tricky answer! The US has current tax treaties with numerous countries which may reduce the amount of tax withheld on your gambling winnings. US gambling winnings earned by residents of the following countries is not taxable in the USA: Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Netherlands, Russia, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Tunisia, Turkey, Ukraine, and the United Kingdom. Individuals who are residents of other countries are typically subject up to a 30% tax withholding by the casino. If the casino withheld, and you are from a treaty country, the only way to get it released is via a tax return as well. Make sure to bring documentation with you if you live in one of these treaty countries. The treaty and possible withholding is based on your residence not necessarily just your country of citizenship.
3) What is an ITIN and how do I get one?
An ITIN (Individual Taxpayer Identification Number) is a nine-digit number that is issued by the IRS to individuals for federal tax purposes only to those who are not eligible for a social security number. An application for an ITIN is most often submitted with a valid tax return to support the need for the individual to obtain an ITIN. There are some limited exceptions to this requirement. During 2012 the rules and regulations for the Form W-7 were revised causing additional delays in the application process. VERY SPECIFIC PAPERWORK is required to prove your identity.
In the past the casinos were helpful in this process but that is not necessarily the case any longer due to all the new IRS changes. If you anticipate needing an ITIN, we recommend taking the necessary steps BEFORE your travels to the United States so you can BRING the required documentation with you. In addition to a lengthy approval process, if your ITIN goes unused for a few years, you will have to renew it, by again, providing more and more documentation.
The actual records vary depending upon the person needing the ITIN. You will need at least one document to prove identity and another document for foreign status. One of the documents must contain a recent photograph, unless the application is for a dependent under 14, or 18 if a student.
An unexpired passport is the only document that satisfies both requirements. You can apply for an ITIN without using the passport. There are alternative documents!
The IRS has a table of documents on page 3 of the Instructions for Form W-7. https://www.irs.gov/pub/irs-pdf/iw7.pdf
4) What is a Certifying Acceptance Agent (CAA)?
A Certifying Acceptance Agent (CAA) is authorized by agreement with the IRS to review identity documents and assist taxpayers with Form W-7, Application for Individual Taxpayer Identification Number (ITIN). The CAA assumes a greater responsibility that an Acceptance Agent in facilitating the application process.
The CAA’s job is to be your agent to help you through the ITIN process, from beginning to end. They communicate with the IRS on your behalf and help with any queries.
5) What can a Certified Acceptance Agent do on my behalf?
A CAA can help you with tax return preparation, document verification, W-7 preparation and submission of the application to the IRS. The CAA can follow the process through the IRS system and contact them directly should the need arise. You won’t need to send in original documents, unless the IRS specifically requests them as part of their review process. The CAA receives notifications from the IRS about your application, as well as a copy of the ITIN when it is issued.
The CAA is a facilitator who helps an applicant and the IRS process applications for ITIN’s. The CAA follows the ITIN process from beginning to end and has to comply with IRS regulations. The CAA has specific requirements when submitting applications for ITIN’s and for record keeping. There are also responsibilities, per the agreement the CAA has with the IRS, to help the taxpayer from the time the application is prepared, through the IRS processing of the application, and until the ITIN is relinquished by the taxpayer, cancelled by the IRS, or the taxpayer becomes eligible for a Social Security number.
* This information does not constitute legal advice and you should not act upon the information provided above without obtaining specific advice from a qualified specialist. No representation or warranty is given as to the accuracy or completeness of the information provided above, and we do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on this information for any decision based on it without our knowledge.