During the football season, many US taxpayers place amicable wagers on their preferred teams. While this activity is generally innocuous, the IRS Criminal Investigation (CI) becomes involved when it crosses the line into unlawful gambling.
Illegal wagering can result in various criminal offenses, including money laundering and tax evasion.
IRS Uncovers $178M in Illegal Sports Betting, High Convictions
CI initiated over a hundred investigations into unlawful wagering activities involving over $178 million between 2021 and 2023. In 89 cases, indictments were issued, resulting in a 96% conviction rate for those prosecuted.
In these cases, the average penitentiary sentence for those found convicted was 23 months.
IRS Criminal Investigation Chief Jim Lee remarked, “Sports betting is all fun and games until funds are laundered and individuals fail to meet their tax obligations.”
Lee emphasized that CI’s special agents collaborate with public-private partnerships and closely monitor data from multiple sources, including currency transaction reports and suspicious activity reports.
These data sources aid in identifying illicit activities like money laundering and tax evasion.
A case involving Vincent Delgiudice, also known as ‘Uncle Mick,’ who conducted an illicit gambling operation in the greater Chicago area for decades, came to light.
Approximately one thousand speculators placed wagering on various sporting events, including baseball, basketball, and football, with Delgiudice.
To pay prospective losses, he frequently gambled in casinos.
Then, Delgiudice laundered his wagering winnings through international cashier’s checks and business investments.
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IRS Targets Illegal Gambling: Convictions and Tax Obligations
In March 2022, he was sentenced to 18 months in federal prison and ordered to forfeit $3.6 million for money laundering and running an unlawful gambling operation.
When filing their annual tax returns, individuals participating in sports betting must disclose their winnings on Form W-2G.
The IRS encourages individuals to keep thorough documents of all wagering transactions, including wagers placed, winnings received, and losses sustained.
The IRS recommends that individuals with queries about their tax obligations related to sports wagering or uncertain about reporting gambling income consult tax professionals or visit the IRS website for more information.
It is crucial to observe that ignorance of tax law does not absolve individuals of their obligations.
Please visit IRS.gov for information on reporting wagering income and other tax-related inquiries.
IRS Criminal Investigation (CI) is the investigative branch of the IRS and is responsible for investigating financial crimes.
These investigations include tax fraud, narcotics trafficking, money laundering, public corruption, healthcare fraud, and identity theft. Special agents of CI have the exclusive authority to investigate violations of the Internal Revenue Code, and their federal conviction rate exceeds 90 percent.
The agency administers twenty branch offices in the United States and twelve attached posts abroad.
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