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Lottery winnings? Prepare to be audited

conner

In 2023 I won a $10,000 NY State lottery prize and of course they deducted all the taxes and gave me a W2 -G Form . And for the first time in my life I was audited / had taxes reviewed by the iRS which held up my return for about 45 days.Again in 2024 I hit the same lottery prize again for 10,000 now NY State is reviewing my return and holding up my refund . This is nonsense since I take the standard deduction and only have ONE W2 along with my W2 G.Everything has been submitted there is NOTHING to review since my taxes are cut and dry. I always double check my return and Free Tax USA has been 100% spot on accurate.Its not that difficult to figure out. You take your earnings subtract your standard deduction . Then add up what you payed in NY State taxes, go to the NY State tax table and it shows exactly what you should have paid, Anything below that number you owe anything above they owe you.The moral to the story is if you win money and file a W2 G prepare to be audited.All I'm saying is you better be a honest tax payer like me because they can and will go back at least 3 years

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Comments

JMSSGV

What exactly did they "audit"? Did they ask you to provide additional information or documentation on something?

conner

https://community.freetaxusa.com/discussion/comment/4072#Comment_4072

I wouldn't say it was a audit but a review of my taxes . I spoke with the IRS on the phone last year and they said they were going back to check the accuracy of my returns for the last 3 years. They didn't ask me for anything because like I said my taxes are basic cut and dry with only one W-2 and a W2- G. and I took the standard deduction.Instead of getting my tax refund in the begginning of Feb I got it in late March. Now this year NY State is doing the same thing.I spoke with others that had their return held up till May . It was 100% triggered by gambling winnings because I have never been audited before.

JMSSGV

The IRS does not contact you by phone. Did they send a letter explaining what they were asking about? If you took no deductions and had no dependents, the only thing that they might question is unreported income.

conner

I CALLED the IRS. Hard to get through but I did. The man I spoke with on the phone said I wou;ld be getting a letter in the mail but I didn't get one. I kept checking and eventually it was approved..I only have one job ,Same job for the last 15 years FEDEX.So there was no unreported income. My taxes are as basic as they get I couldn't cheat if I wanted too . Which is so puzzling as to why they flagged my return. Had to be the W2-G and the NY state lottery sends both the NY State and IRS a copy of that .

kiarab

Hello,

Being audited can be a frustrating experience. With the rise of technology, a lot of returns that are flagged is done through an automatic process. We are not informed of what those flags may be so it can be hard to predict them.

I’m glad that the process (annoying as it is) wasn’t too bad for you. The IRS has been understaffed, so it can take a while to finish up the process. Hopefully NY will be relatively painless as well.

And your advice is sound. Being an honest taxpayer is the best way to go to prevent complications with the IRS. I’d might also recommend to keep your tax records or make sure you have access to your records for the last three years as well to help with the audit process.