Taxable Wagers Excise Tax Form 730 What is Taxed?
This tax is applicable to the wagers who are accepted in the country of United States or placed by a person
who resides in the country with a person who is a U.S. resident or has the citizenship of the country.
Taxable wagers include:
- A person engaged in the business of accepting wagers on a game contest or sports event.
- In a wagering pool on a game contest or at the event of sport, in the case when the pool brings profit
- In a lottery, that fetches profit, this includes the punchboards, the numbers game, policy and similar
types of wagering.
Sports Event: Included under sports events, there is every type of amateur,
scholastic or professional sports competition, such as : auto racing, basketball, baseball, bowling,
billiards, boxing, cards, checkers, croquet, cricket, dog racing, football, gymnastics, golf, hockey, horse
racing, lacrosse, rugby, squash, soccer, tennis, tug of war, track and wrestling.
Contest : A contest is analogous to any competition involving quality, speed,
endurance, politics, strength, skill or looks. This includes events like elections , the result of
nominating conventions, log-rolling contests, dance marathons, weightlifting contests(muscle building
contests), wood-chopping contests, beauty contests and spelling bees.
Wagering Pool : A wagering pool, which is organized for the purpose of profit,
includes any technique or theme for providing prizes to at least one or a lot of winning bettors supported
by the end result of a sports event, a contest or a mix or series of those events or contests if the
wagering pool is controlled and conducted for the aim of creating a profit.
A wagering pool or lottery could also be conducted for profit even though an instantaneous profit doesn’t
occur. If a person operates the wagering pool or lottery with the expectation of a profit within the variety
of inflated sales, attendance or different indirect advantages, it is being conducted for profit.
Lottery : Under the lottery section, it includes the punchboards, number game,
policy and similar varieties of wagering. Generally, a lottery is conducted for a gain(profit) that includes
any methodology or themes for the dispersion of prizes among the people involved in the wagering or securing
an opportunity to win the prizes. The winning prizes square measure is typically determined by the drawing
of numbers, tickets or symbols, from a wheel or alternative instrumentality or by the result of a given
Credit for Overpayment Taxes
The tax filer can claim a credit for any overpayment of tax. But the claim must be made within 3 years from
the time the Form 730 is filed or 2 years from the time the tax was paid, whichever is later.
No credit is permitted unless a statement of the facts involving the overpayment that includes the following
information is attached:
1. An explanation of the reason for claiming a credit.
2. The payment date and the tax amount.
3. The amount involving any previous claims or any part, has been filed.
4. A statement that you :
- Have not collected(whether as a separate charge or otherwise) the amount of the tax from the person that
placed the wager on which the tax was imposed.
- Have repaid the amount of the tax to the person that placed the wager.
- Have the written consent of the person that placed the wager to the allowance of the credit. The consent
must be attached to the return.
Credit for Wagers Laid Off by You
If the tax filer accepts a wager and lays off all or a part of that wager with a person who is liable for
tax, follow the rules below to claim a credit depending on whether or not you paid the tax.
If an individual has not paid the tax, then he/she can claim a credit on the Form 730 in the amount of the
tax due for the laid-off wager, if the certificate described in Regulations Section 44.6419-2(d) is attached
to the Form 730 for the month during which the wager was accepted and laid off.
If an individual has paid the tax, then he/she can claim a credit for the tax paid on the laid-off amount.
Note that the claim should be filed within 3 years from the time the tax was filed or 2 years from the time
the tax was paid, whichever is later. Interest will not be allowed on a credit for the tax imposed on a
wager that the tax filer laid off.
No credit is allowed to the return for each laid-off wager unless the following information is attached:
1. The certificate described in Regulations Section 44.6419-2(d).
2. A statement that includes :
- the reason for the credit.
- the month in which the tax was paid.
- the date of payment.
- Whether any previous claim covering all or part of the amount involved has been filed.
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