Cash vs checks, CTRs, taxes, and dealing with cash in general

I've posted many times before that I was a casino cashier with harrahs for about 3 years. Anytime you receive cash as a payout, it is added together. For example the casino gives you a $200 voucher to come play. You bring it to the cage and get $200 cash for it. Then you go play blackjack and win and you cash out $2000 in chips at the cage. You then go play slots and win and cash out $4000 in tickets at the cage. You go play some more slots and lose it all so you do a credit card cash advance for $5000 to go gamble some more. Boom you just hit $10k. You had a CTR filed for the total of all transactions $11,200.00. Even if you don't win more than $10k, if you have run through that amount of money then you will have a CTR which is filed to try and stop/track money laundering issues etc... When I worked there we usually put you on a tracking list when you reached $3k and then we would just record every additional transaction to keep a running total.

We had multiple people who would end up having the sum of their transactions over $10,000. They argue they were not even winning and would refuse to provide ID. Sometimes they would hold on to chips or tickets and think they could just cash them the next day. Guess what buddy we won't ever cash them until you provide ID. And we just called surveillance to track you... And we just filled out suspicious activity form

Quote: AcesAndEights

Aren't you required to report all gambling winnings, regardless of the location of the casino, on your state return? If you're bending the rules, that's fine, I'm not calling you out as I would do the same in one of these dumb states.

Yes, it's included in your Federal AGI which goes on the state return.

Quote: iamthepush

I was at the wynn a few years ago with a couple of buds. they were in the book watching a BB game. I would buy in at a BJ game for $1,000 -$2,000 play a few hands until I was up (a couple of times I busted) cash out at cage. Go watch the game for a few mins. Rinse and repeat. Everytime I bought in it was with my players card. The last time I tried to buy in (w/my card), pit boss told me if i did he was going to have fill out some form (SAR i think) and didn't really feell like it, so he told me to scram and next time I buy in do it with out using my card.
.

Quote: Jimbo

The CTR must be filed if there is a cash transaction or a series of cash transactions in excess of $10,000--within a 24 hour period. (With casinos, this 24-hour rule may not be totally accurate, since most casinos treat this as their reporting day as beginning and ending at the same time each day--such as 5:00 am.) Casinos have procedures in place to track this--which is why you may find that your cash transactions of a lesser amount are being logged, since you may trigger the $10,000 amount as the result of multiple transactions in the course of the day.

I saw this in action last night. I was watching the
3 Card Poker game and a guy in his 70's bought
in for a grand. He was betting $400 a hand and
in a few min laid another grand of the table. The
pit guy had the dealer push it back to him and
he went to the guy and said 'we can't take your
money'. Old guy goes away pissed.

Awhile later I ask the pit person what happened.
He says 'we really can't talk about', and then
proceeds to tell me every possible detail.

The old guy has been spending money like water
for months. But he refuses to get a card or tell
him his name and SS number. So they let it go
and let it go until they now have a stack of paperwork
on the guy 4in high. He actually tells me they
can get in trouble with the IRS for letting the guy
continue to play for large amounts with no CTR's
being filed on him. He's lost 10's of thousands over
the last few months.

So now they restrict him to a grand a day and that's
it. I got the impression the IRS has all these stricter
rules now, but nobody is enforcing them. The casino
isn't going to volunteer the info, the IRS would have
to have an actual spy in the casino looking for
infractions. I don't think they have the manpower
for that.

Okay...I have a few questions, and a comment on a couple of different things.

First - the comments. Thanks to all of you who have shared your insights. I have learned quite a bit - SARs, CTRs, etc.

Second - I fully appreciate the sentiment about just pay your taxes. It's a statement about integrity. I fully endorse this.

That being said, I feel it is my duty to legally minimize my tax liability as much as I can.

So - here's my situation. Like a lot of people. I have debt. But, I make my payments on time, in full. I have leftover money when the bills are paid and my IRA is getting maxed each year. So, because I'm single, older and don't have a lot of the obligations others have, I go to the casinos in Mississippi when I can. They're about 40 minutes away. Fairly convenient for a weekend trip.

Yesterday, I was playing video poker - really about the only thing I play, since it's fairly fast paced, I can sit at the bar, converse with various people if the mood strikes, or ignore the world around me as I try to convince myself I can somehow predict future success. (The old "This machine must pay out sooner or later" philosophy. Stupid, but convincing enough at times)

So, within my first half hour, I win a Royal on the $2 per credit, max coins played, a progressive for over 10k. (11,552 to be precise)

I was thrilled on the inside. Maybe a little on the outside, as I did a fist pump without thinking about it. The back of my mind is, "Crap! This is going to put me into the 25% tax bracket!" So, not only do I have set aside over 2500 bucks for next years tax bill for the winnings, I'll have to set aside 25% of the rest of my salary, and I've only had 15% being taken out. Granted, I'm still in a better position, and with my IRA being maxed, there's a chance I can reduce my tax bill a fair amount.

I didn't really want to carry thousands in cash on me. I might end up giving it all back to them - and still be on the hook for the tax bill to come. So, since the attendant was kind enough to offer, I opted for a 10k check and the rest in cash.

So - since I have no plans to try and cheat the IRS - was this a mistake? Have I set myself up for some audits just because I like to play video poker?

Who actually gets these CTRs? ( I don't this would qualify as an SAR) What do they do with them?

And, is my bank going to freak out if I deposit this check? I've banked with them for ...4 years and have only recently started gambling because I couldn't really afford to do so before.

I'd like to think that if I conduct myself where even if I get audited there'd be no penalty - these allusions to the players card not being entirely accurate...well, that concerns me a great deal. Especially since this jackpot is going to really boost my win/loss percentage. The gist of it is - I just don't want the hassle of the audit, and anybody can make a mistake given our complex tax codes.

And - they took 3% for the state of Mississippi - I guess I'll now have to file a return for their state since I won it there? I'll do it if I can get that $346.56 back. The last thing I want to do is be on the hook and owe them more taxes because of the non-jackpot wins.

Thoughts, comments, insights? Advice?

(Why do these victories always seem to happen in the first 30 minutes? I'd planned to play for 4 hours but felt like I should leave while ahead)

Because it was a hand pay and you got a w2-g, no CTR is necessary. You also could have had federal taxes withheld if you wanted.

Quote: Ibeatyouraces

Because it was a hand pay and you got a w2-g, no CTR is necessary. You also could have had federal taxes withheld if you wanted.

Had he opted for cash instead of a check it would have generated a CTR. The fact that it was a W2G has no bearing.

Quote: DRich

Had he opted for cash instead of a check it would have generated a CTR. The fact that it was a W2G has no bearing.

I didn't have one, nor was one generated on mine. I had 7 total JP's $10,000 or higher. Took all in cash. Unless I was lied to, because I asked.

Either way, it had no bearing on anything and won't affect his taxes.

Quote: Ibeatyouraces

I didn't have one, nor was one generated on mine. I had 7 total JP's $10,000 or higher. Took all in cash. Unless I was lied to, because I asked.

Either way, it had no bearing on anything and won't affect his taxes.

How would you know if the casino did a CTR? There is no participation for the winner, it is just an internal casino process. If you deposited that same $10,000 in cash at your bank they would do one too.

You are correct, no affect on taxes.

Quote: DRich

How would you know if the casino did a CTR? There is no participation for the winner, it is just an internal casino process. If you deposited that same $10,000 in cash at your bank they would do one too.

You are correct, no affect on taxes.

Again, I asked. More out of curiosity then anything. I was told no. But as I said. CTR's should be of no concern. It's the SAR's that should be.

Quote: Ibeatyouraces

But as I said. CTR's should be of no concern. It's the SAR's that should be.

Absolutely! For myself, a few CTR's are easily explained. SAR's are worse because you are unlikely to even know about them.

An SAR from a casino, generally has little consequence, if you are playing unrated. If they don't know who you are they are required to write a description. It is highly unlikely that SAR, with a description instead of identity, will be linked to you at any government agency. It is more just a safeguard for the casino.

Now, an SAR from a bank or company that knows your identity is another matter. They will fill that out with your information and it will be linked to you. And again, the worse part is that you won't even know they have filled it out.

That is why as a small/mid level professional gambler, I make a point to introduce myself to the branch manager and tell him what I do. I also try to do most of my sizable cash transactions at this 'home' branch where they know me, rather than other branches. I also keep those 'sizable' transactions to a minimum. I don't need to be depositing and withdrawing a few thousand dollars every other day as my bankroll fluctuates. That looks like a drug dealer. I only need to 'adjust' after sizable run-up's or declines. (hopefully gains).

Not sure I get what you mean by "no affect on taxes". The casino, providing a w-2g, will by law forward that to the IRS. So, I'm pretty sure my tax liability will increase. (assuming I claim it - and by law, I should.)


I'd thought about having the fed taxes withheld. For now - I think I'm going to take 25% of the earnings and put it in a 6 month CD. A tiny bit of interest is better than letting the feds hold onto it all that time with no return.

So essentially, I have nothing to worry about other than slightly more money in taxes, offset by the jackpot. I'm still about 7k to the good after taxes.

Uk. I cant add anything that hasn't been said.

-----------------------------------

"as I try to convince myself I can somehow predict future success. (The old "This machine must pay out sooner or later" philosophy. Stupid, but convincing enough at times)"

This was brilliantly written IMO. It captured many VP playes and other gambler's thought process.

Quote: ukaserex

Not sure I get what you mean by "no affect on taxes". The casino, providing a w-2g, will by law forward that to the IRS. So, I'm pretty sure my tax liability will increase. (assuming I claim it - and by law, I should.)


I'd thought about having the fed taxes withheld. For now - I think I'm going to take 25% of the earnings and put it in a 6 month CD. A tiny bit of interest is better than letting the feds hold onto it all that time with no return.

So essentially, I have nothing to worry about other than slightly more money in taxes, offset by the jackpot. I'm still about 7k to the good after taxes.

Of course you'll owe taxes on it. No different if you earned it at work.

You should not be afraid of an increased tax liability. Your whole earnings don't go up a percentage, it's ramped up with breaks that are usually a little different every year, based on CPI and other factors. But the 15%, if that was going to be sufficient to cover your retired indebtedness, will still be sufficient for this year. Only that portion of what you won (likely not all of it, but they haven't published the breaks, probably won't til mid-January) that puts you into a higher tax bracket will be taxed at that higher rate. That's already calculated into the tax tables before you look up your indebtedness on a single line by AGI.

I think your plan for the CD is a good one, except you can afford to get a 9 month one if you can find it for perhaps a better rate. July 15-Apr 15 is 9 months.

Edit: you would be foolish not to file it with the w2g accounted for. I think that's one of the 3 best ways to ensure yourself an IRS problem, because the casino is sure-by-God going to file it, and you have to match up with it. They do check those. It may take a while. But they'll be on it.