Tax cheaters buy used non-winning lottery tickets to offset winnings


There’s usually lots of these on the sidewalk outside of stores in impoverished areas. Entrepreneurs are everywhere; one man gathers what another man spills.

Given the rate at which scratch ticket designs turn over(and the fact that they have various markings for anti-cheating purposes, and are generally sold through specially regulated venues(at least in MA, it’s a separate machine, next to the cash register, at the convenience store or the like, it isn’t bundled into the rest of your purchase); this seems like playing with fire.

Doubly so because somebody cheating on taxes related to a lottery win is probably the juiciest combination of ‘is actually cheating by a moderately large amount’ and ‘has no scary accountants and lawyers who could make going after him actually difficult’ that an IRS auditor could expect to find. Most people who have zero legal/financial sophistication are worth less; and most who cheat in really impressive style have access to high powered counsel.


Since state run lotteries are basically just legal rackets for the government that no one else is allowed to participate in, I’m okay with this.


Some time ago I did taxes for a few seasons, and one guy actually walked in with a grocery bag full of losing tickets, and I didn’t even charge him extra for adding them up, which I should have. I told a friend, and he said, “You dope, those were his buddies’ lottery tickets.”

I have no street smarts at all.


The only sort of losses you can credit against gambling wins are gambling losses, so if you mean to cheat, this is about the only conceivable way to try. It’s not very sophisticated, but even a fancy-pants $700/hr lawyer and accountant couldn’t do much for you.


There was a thing where criminals would buy winning horse race tickets to launder money.

Just what I was looking for… a way to make sure the IRS audits me every year!


Why are gambling losses considered deductible? Is it simply because winnings are taxable?

Edit: now that I think about it I guess it makes sense. If you spent $10,000 on lotteries in a year and only won $5,000 I guess it would be cruel to tax those winnings.

Interesting. I read somewhere about an analysis of where winning lottery tickets (in Florida – of course) were clustered; there were way more in some places than others. I believe the idea was that you can sell a $500 winning ticket to (presumably) a druglord for $1000, who then magically has $500 in clean money!

Step One of my nefarious plan: Win the lottery

I guess that if you tax lottery winnings then you must expect this kind of idiocy.

Sorry - I meant to say

Taxing lottery winnings will ofttimes engender novel secondary markets.


I’ve always thought that lottery wins are tax-free in the US.
And in any case those should really be called scratch and lose tickets.

In the UK, the national lottery (known as ‘The Stupid Tax’) at least provides the Lucky with tax free bounty. To also tax the winnings seems a bit OTT.

It does, but then look at the other side.

Winning a lottery is such a worthy activity, we should not tax it to encourage others to do the same. Unlike, for example, showing up at your job every day and doing a good job. That needs to be taxed.

Now, the reality is, of course, different, but I hate the optics of not taxing winnings (in Canada).


I didn’t read the title and I thought the article was about a dating site for cats and that the article photo was a cat’s profile picture showing him in front of his winnings to impress the ladies.

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