If you are a nonresident alien and you traveled to the U.S. to gamble, you very likely know that casinos withhold tax on your gambling winnings, above a certain threshold amount, and send that money to the Internal Revenue Service ("IRS"). If you have lost more money gambling than you won, you may be surprised to learn that you are entitled to a refund of every cent the casino withheld. Here is the $64,000 question: how does a nonresident alien obtain a refund of the taxes withheld from their gambling activities?
Recently, the IRS has made it much more difficult for nonresident aliens to get a tax refund of the money withheld from their gambling activities. The tax lawyers at the Nardone Law Group, LLC have previously written on the IRS's procedures for withholding taxes on a nonresident alien's gambling winnings. Read that article here. Whether you gamble in Columbus, Ohio or across the U.S., our tax attorneys want to provide nonresident aliens with important information on filing your tax return to obtain your refund of the tax withheld on your gambling winnings. This article provides a guide for nonresident aliens to obtain the refund they are entitled to from the IRS based on their gambling winnings.
Refund Procedures for Nonresident Alien
Generally, a nonresident alien must file Form 1040NR to claim a refund of U.S. tax withheld from a casino based on their gambling winnings. You file the Form 1040NR if the following are true at the end of the tax year: (1) you were a nonresident alien; (2) you were not engaged in a trade or business in the U.S. at any time; (3) you had no income that was effective connected with a U.S. trade or business; (4) your U.S. income tax liability was fully satisfied through withholding of tax by the casino; and (5) you are filing Form 1040NR solely to claim a refund of U.S. tax withheld by the casino. If you only traveled to the U.S. to gamble, and you only had gambling winnings, you would meet these specifications.
The Form 1040NR needs to be supported by qualified substantiation documentation. This is a make-or-break requirement to obtaining your tax refund. The tax lawyers at Nardone Law Group have vast experience in working with the IRS on the issue of substantiation of gambling losses. It is often the most difficult part of the process because the IRS often takes a very strict position with regards to substantiation of gambling losses. The difficulty here is that most nonresident aliens who gamble in the U.S. do not think to maintain reliable documentation establishing their reportable gambling gains and deductible gambling losses. Thus, it is often critical for an experienced tax lawyer to review the documentation to determine if the IRS will accept it as valid evidence of gambling losses.
Contact Nardone Law Group, LLC
If you are a nonresident alien, and you have had taxes withheld from your gambling winnings in the U.S., you should contact an experienced tax lawyer today. The tax lawyers at Nardone Law Group, LLC have vast experience representing nonresident aliens who have gambled in the U.S. before the IRS to obtain tax refunds from gambling. Our experienced tax lawyers will thoroughly review your case to determine whether you are entitled to a refund for the taxes withheld on your U.S. source gambling income. Contact us today for a consultation to discuss your case.