NOTE: The decision explained in this article has since been reversed by the IRS.
The new rules coming out of the new PATH Act provisions starting January 1st 2017 will cause a lot of headaches amongst gamblers worldwide winning some gambling money in the USA. Not only have they abolished the Certified Acceptance Agent program, thus requiring every winner to obtain a certified true copy of his/her passport, but now, only IRS employees can issue an ITIN. According to the notorious American accountant Russ Fox, many of the most important Las Vegas casinos just received an official notice from the IRS, advising them that their power to issue ITINs to their customers had been revoked. The law being the same for everyone, it seems like this provision will apply to the whole casino industry in the United States.
While this change will not affect Canadian winners, it will be a whole different story for winners from countries with a treaty with the United States, exempting them from paying the withheld 30% tax. For Canadian winners, this tax is withheld every time by the casino and can only be recuperated through filing an income tax report, once the fiscal year is over. However, for a French citizen for instance, it was possible, by showing the fiscal exemption via a W-8BEN form and a passport, to automatically obtain an ITIN and save the withholding. Now, if the casino cannot issue ITIN numbers despite what the fiscal treaty says, this tax will have to be withheld. By so doing, any citizen winning will need to file in order to receive what is legally his in the first place. Ouch!
Requesting an ITIN while filing an income tax report in the USA is not as easy as it was. By abolishing the Certified Acceptance Agent program, there is no existing firm outside of the US able to verify your identity like Gamblingtaxes.ca used to do until recently, being member of this program. There used to be IRS agents outside the US territory who could validate your papers but these have been repatriated. In order to proceed by yourself in the United States now, you need to get an appointment with an agent and be lucky enough to meet one who understands your request. It should be easy, but strangely, it is not as it should be!
In short, your choices are very restricted. You can, with your application:
-Send your original passport and lose it for a few months
-Send a certified true copy issued by the original issuer
-Get a certified true copy by the US Embassy or by your country’s Embassy in the US. Watch out! Any notarised copy will be rejected!
Some strong pressures were put on the IRS to bring back the Certified Acceptance Agent program. Unfortunately, the quick answer was as mindless as clear: « Blame the Congress, not us ».
If the law stays the same, any citizen from outside the United States not already possessing a valid ITIN (that now expires after some time without being used) will automatically be withheld 30% on his winnings. Of course, he will be able to recuperate his paid taxes completely, but with a much more complex procedure and months later. Meanwhile, the US government gets tons of cash in its treasure chest. For sure, many of these winners will simply leave this money behind, meaning more money kept by the American government.
Have you paid a 30% tax on your winnings in the United States? Whether you are Canadian, French, from the United Kingdom, or any other country, we can help you! Simply fill this short form so we can advise you for free on what you need to do. This does not commit you in any way! Do not hesitate, contact us with any question.
