The settlement administrator also said that distribution will not occur before 120 days after June 1, 2023. online casinos which were not proper legal entities in the US, where offshore. I understand that most of us are looking at this as a refund of money spent so it shouldn’t be taxed, but the IRS doesn’t always look at things the same way! California plaintiff Cynthia Haines brought. They argue that this lack of transparency is deceptive and misleading to players. Lack of Transparency: Plaintiffs assert that Chumba Casino fails to provide clear and adequate disclosures regarding the odds of winning, game mechanics, and payout rates. Nobody wants to pay taxes if they don’t have to, but you also don’t want to NOT pay if the money is considered taxable income by the IRS – that could cost you a lot in penalties and interest. The lawsuit claims that Chumba Casino’s games are, in fact, illegal gambling activities. It looks like there will be some pretty large payouts with this settlement so the tax consequences could be huge for some people.
I read that the IRS REQUIRES a settlement company to send a 1099 unless the settlement qualifies for tax exception.
But does anyone know what the IRS says? Was there ever an official determination by the IRS? I emailed the settlement administrator with a few questions and they responded that they would not be sending 1099s but that we need to talk to a tax professional about how to handle it. I’ve read several opinions on whether the Big Fish Settlement was taxable or not.
