Gregory Alberico - Page 3

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            theft of Government property, once from 1980 to 1984 and again                              
            from 1986 to 1989.                                                                          
                  During 1990 and 1991, the years in issue, petitioner                                  
            frequented Colorado dog racing tracks and played the slot                                   
            machines in Las Vegas.  For 1990 and 1991, petitioner reported                              
            his gambling winnings as $87,619 and $203,567, respectively, and                            
            his gambling losses as $78,864 and $187,000, respectively.  The                             
            winnings reported on petitioner's Federal income tax returns for                            
            1990 and 1991 are in excess of the amounts stated as reported                               
            income for gambling winnings3 on petitioner's Forms W-2G.4                                  

            3For 1990 and 1991, petitioner reported $87,619 and $203,567                                
            respectively as gambling winnings.  However, petitioner's Form W-                           
            2G income statements only showed petitioner winning $21,800.70                              
            and $92,625.70, respectively.                                                               
            4The payer of proceeds from a wager must report gambling                                    
            winnings on Form W-2G if a taxpayer receives:                                               
                        (1) $600 or more in gambling winnings from:                                     
                              (a) Horse racing, dog racing, jai alai, state                             
                                    lotteries, and other wagering transactions                          
                                    * * * [in which] the winnings are at least                          
                                    300 times the amount of the wager; or                               
                              (b) Lotteries, raffles, sweepstakes, wager-                               
                                    ing pools, or drawings, such as those                               
                                    held by churches or civic organizations;                            
                        (2) $1,200 or more of gambling winnings from                                    
                              bingo or slot machines; or                                                
                        (3) $1,500 or more of * * * [winnings] from keno.                               
            Instructions to Recipient for IRS Form W-2G, Statement for Recip-                           
            ients of Certain Gambling Winnings.                                                         
                  Under the general rule of sec. 3402(q) certain gambling                               
            winnings are subject to withholding:                                                        
                  Sec. 3402(q)  Extension of Withholding to Certain                                     
                  Gambling Winnings.--                                                                  
                                                                          (continued...)                



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