Tax taken out of wins??

[Nifty29]

Hiya all

I started playing at worldwinner.com lately as I love the puzzle games etc and have done alright, but noticed my prizes werent as advertised - apparently they have been taking out 30% for tax...WTF?? Im not even a US resident!

Ive been told by them that I have to mail some form etc to the IRS with 27 forms of ID all signed by our Prime Minister etc etc and the IRS will send me a tax ID - then I may be able to stop the tax being taken out if I also submit some other form but I have to wait to get my tax ID.

It just seems stupid - why would I pay tax when Im not a US citizen?

Anyone have any advice? At present they have over $500 of mine in winnings

(Note to MAX - sorry i know this isnt strictly a casino but I felt it wouldnt get a response in the lower forums)

[winbig]

Originally Posted by Nifty29

Hiya all

I started playing at worldwinner.com lately as I love the puzzle games etc and have done alright, but noticed my prizes werent as advertised - apparently they have been taking out 30% for tax...WTF?? Im not even a US resident!

Ive been told by them that I have to mail some form etc to the IRS with 27 forms of ID all signed by our Prime Minister etc etc and the IRS will send me a tax ID - then I may be able to stop the tax being taken out if I also submit some other form but I have to wait to get my tax ID.

It just seems stupid - why would I pay tax when Im not a US citizen?

Anyone have any advice? At present they have over $500 of mine in winnings

(Note to MAX - sorry i know this isnt strictly a casino but I felt it wouldnt get a response in the lower forums)

Weird. Even if you HAD to pay taxes on winnings, $500 isn't even enough to trip the alarm.

[vinylweatherman]

Originally Posted by Nifty29

Hiya all

I started playing at worldwinner.com lately as I love the puzzle games etc and have done alright, but noticed my prizes werent as advertised - apparently they have been taking out 30% for tax...WTF?? Im not even a US resident!

Ive been told by them that I have to mail some form etc to the IRS with 27 forms of ID all signed by our Prime Minister etc etc and the IRS will send me a tax ID - then I may be able to stop the tax being taken out if I also submit some other form but I have to wait to get my tax ID.

It just seems stupid - why would I pay tax when Im not a US citizen?

Anyone have any advice? At present they have over $500 of mine in winnings

(Note to MAX - sorry i know this isnt strictly a casino but I felt it wouldnt get a response in the lower forums)

Those IRS thieves pull the same stunt with tourists who come to Vegas, however at least there it only applies to payouts over a certain amount PER GAME of around $1000. The tax can be reclaimed by a simpler route, however, why is it being taken in the first place, as surely it is illegal to operate a gambling site from the US, and if this is a SKILL COMPETITION site, then surely no tax is due anyway, as it is just like sending in a prize crossword to the local newspaper (or are the IRS even bigger thieves than our own UK Inland Revenue )

[winbig]

I'll tone it down a little, but you should tell them to go take a long walk off a short pier.

http://msn.worldwinner.com/cgi/legal/terms.html
Section 2.3 of their T&C:

You are subject to all laws of the state, province and/or country in which you reside and from which you access the Site and are solely responsible for obeying those laws. You agree the Site cannot be held liable if laws applicable to you restrict or prohibit your participation. The Site makes no representations or warranties, implicit or explicit, as to your legal right to participate in any tournament offered on the Site nor shall any person affiliated, or claiming affiliation, with the Site have authority to make any such representations or warranties.
The Site reserves the right to monitor the location from which you access the Site and to block access from any jurisdiction other than the U.S., or any U.S. jurisdiction in which participation is illegal or restricted. For example, Cash Competitions in card games are not offered if you access the site from Indiana or Maine. The Site may require any participant receiving any prize to provide the Site with proof that he or she is eligible to participate according to Sections 2.1 and 2.2 above.

It is the policy of the Site, in compliance with United States Internal Revenue Service regulations, to send an IRS Form 1099 or other appropriate form to any person who wins in excess of $600 (USD) on the Site in any given year. Depending on the jurisdiction in which you reside, the Site may also send you additional similar tax forms. However, you remain solely responsible for paying all federal and other taxes in accordance with the laws that apply in your state, province, and/or country of residence.

Since it's 2008, I'm sure it's not "a given year", as long as this isn't a cashout from 2007.

[Nifty29]

I dont get the whole idea - I asked them to stop deducting the 30% as I wont be filing a US tax return, but their response was something like 'Worldwinner is not qualified to give tax advice - please enlist the help of a registered tax agent for any queries of this nature'

Yeah. Right. Im gonna fly over to the States and meet with a tax agent.

This is what is stated in my account info:

f you do not have a Social Security Number or Individual Taxpayer Identification Number (ITIN) you may still compete at WorldWinner.

U.S. Government regulations require that you complete Form W-8BEN, which requires an ITIN. You may request an Individual Taxpayer Identification Number by completing and submitting a Form W-7. Click here to review the form, print it out, and submit it to the U.S. Internal Revenue Service (IRS). Once you have received an ITIN, you may complete Form W-8BEN by signing-in and clicking on "Modify My Tax Form" from your "My Account" page.

While your ITIN request is being processed, you are welcome to continue competing at WorldWinner.

Now it's back to the games...

Last year, they ripped me off for about $550 and this year Im already out of pocket about $150 - and if I dont get myself a tax id number and deal back and forth with the IRS then I wont ever see it again.

I think VWM's point is valid too...being games of skill they shouldnt be taxed anyway, after all it isnt gambling is it??

Its a shame because the games are great etc but I cant stand having 30% of my winnings held all the time.

According to their own terms, it is MY responsibility to organise my tax and legal obligations so why are THEY taking it upon themselves to do it.

[winbig]

Originally Posted by Nifty29

I dont get the whole idea - I asked them to stop deducting the 30% as I wont be filing a US tax return, but their response was something like 'Worldwinner is not qualified to give tax advice - please enlist the help of a registered tax agent for any queries of this nature'

Yeah. Right. Im gonna fly over to the States and meet with a tax agent.

This is what is stated in my account info:



Last year, they ripped me off for about $550 and this year Im already out of pocket about $150 - and if I dont get myself a tax id number and deal back and forth with the IRS then I wont ever see it again.

I think VWM's point is valid too...being games of skill they shouldnt be taxed anyway, after all it isnt gambling is it??

Its a shame because the games are great etc but I cant stand having 30% of my winnings held all the time.

According to their own terms, it is MY responsibility to organise my tax and legal obligations so why are THEY taking it upon themselves to do it.

I'm confused here. What's different between WW and Pogo? I don't see Pogo withholding any taxes for their players' $4999 wins.

btw - Where's the proof that they actually pay the IRS the money they claim to withhold?

[GrandMaster]

Originally Posted by Nifty29

I started playing at worldwinner.com lately as I love the puzzle games etc and have done alright, but noticed my prizes werent as advertised - apparently they have been taking out 30% for tax...WTF?? Im not even a US resident!

Ive been told by them that I have to mail some form etc to the IRS with 27 forms of ID all signed by our Prime Minister etc etc and the IRS will send me a tax ID - then I may be able to stop the tax being taken out if I also submit some other form but I have to wait to get my tax ID.

It just seems stupid - why would I pay tax when Im not a US citizen?

Anyone have any advice? At present they have over $500 of mine in winnings

You owe US taxes on any US source income, unless there is a provision in the Australia-US double taxation treaty that makes it exempt.

Originally Posted by vinylweatherman

Those IRS thieves pull the same stunt with tourists who come to Vegas, however at least there it only applies to payouts over a certain amount PER GAME of around $1000. The tax can be reclaimed by a simpler route, however, why is it being taken in the first place, as surely it is illegal to operate a gambling site from the US, and if this is a SKILL COMPETITION site, then surely no tax is due anyway, as it is just like sending in a prize crossword to the local newspaper (or are the IRS even bigger thieves than our own UK Inland Revenue )

By the sound of it is, it is not a gambling site. Any income, including gambling wins from US sources is subject to federal income tax unless specifically exempted. If you are a US resident and win the Nobel Prize, you get taxed as well.

It is unlikely that most tourists would file a tax return voluntarily, hence the requirement to withhold 30% of larger wins. If the tax laws were properly enforced in Vegas, including smaller wins that don't generate paperwork, the casinos would fold in a week.

Originally Posted by Nifty29

I dont get the whole idea - I asked them to stop deducting the 30% as I wont be filing a US tax return, but their response was something like 'Worldwinner is not qualified to give tax advice - please enlist the help of a registered tax agent for any queries of this nature'

Yeah. Right. Im gonna fly over to the States and meet with a tax agent.

This is what is stated in my account info:



Last year, they ripped me off for about $550 and this year Im already out of pocket about $150 - and if I dont get myself a tax id number and deal back and forth with the IRS then I wont ever see it again.

I think VWM's point is valid too...being games of skill they shouldnt be taxed anyway, after all it isnt gambling is it??

Its a shame because the games are great etc but I cant stand having 30% of my winnings held all the time.

According to their own terms, it is MY responsibility to organise my tax and legal obligations so why are THEY taking it upon themselves to do it.

Because they are required by law to withhold tax to ensure that you don't just forget about your tax obligations in the US.

[Nifty29]

Good point.

I guess if I filed a tax return I would find out......

[GrandMaster]

Originally Posted by Nifty29

I think VWM's point is valid too...being games of skill they shouldnt be taxed anyway, after all it isnt gambling is it??

I think you will find that it is called an "income tax", not a gambling tax, and applies to all kinds of income.

[Nifty29]

Thanks Grandmaster.

I believe there is an exemption - but I have to go through all the hoops and paperwork to have any chance of claiming it.

Wouldnt the site be able to ascertain the exemptions and not deduct tax from players from those countries? I found the info fairly easily on the IRS site.