Hello all.

You won 10 million on the lottery. After paying for the liquor excesses, and the psychiatric treatment visit, you go to collect the prize.

You get a 5 million check and deposit it in your account. Next day you call The IRS (tax) office to congratulate them for making/getting/earning/taking from you a 5 million share with zero investment and not even moving a finger. They did not wait for the tax filing limit date to collect.

The filing date limit is April 15 next year. Do you think the tax institution will return funds to you corresponding to the collection in advance of about 10 months ? If does not happen, where can you claim 'justice' to get back 10 months of a full prize amount juicy interest the IRS did not allow you to have ?

-Totally hypothetic; you did not win a peanut- 😄 Neither did I.

Isn't 5 million enough?

Easy. Change your citizenship. In our country, the tax on winnings over approximately $700 is 10% of the amount paid by the lottery organizer.

ps. I think you would be happy with every win.

1 hour ago, Externet said:

You get a 5 million check and deposit it in your account. Next day you call The IRS (tax) office to congratulate them for making/getting/earning/taking from you a 5 million share with zero investment and not even moving a finger. They did not wait for the tax filing limit date to collect.

The people who introduced these regulations did not elect them selves. It was necessary to vote for those who planned to abolish these taxes on winnings. If this had become a nationwide meme, politicians would have competed with each other in promising this or that, and if they had not kept their word, you would have held them accountable in the next election.

ps2. Euromillions are tax-free in majority of European countries: https://www.euro-millions.com/tax

2 hours ago, Externet said:

-Totally hypothetic; you did not win a peanut- 😄 Neither did I.

When I went to the casino, I almost always left with a win. Why go to the casino to lose? That wouldn't make any sense... ;)

Would starting an LLC just for playing the lottery work?

3 hours ago, Externet said:

The filing date limit is April 15 next year.

That’s the filing deadline, but if you owe them too much you have to pay a penalty. In the US, to be some extent, taxes have to be paid as you go. It’s why there’s withholding on each paycheck, with the goal of owing nothing when the year ends. If you owe more than $1k (and some other caveats apply) then you owe a penalty.

20 minutes ago, Phi for All said:

Would starting an LLC just for playing the lottery work?

I doubt it. There are loopholes, and more for the rich, but I suspect this isn’t one. Unless the LLC already existed when you won I suspect it would not save you. Switching citizenship won’t work, either; taxes are paid according to residence. When I did my postdoc in Canada, I paid Canadian taxes. (and if I made enough the US would have taken a bite, too). Plus doing the switch after the fact wouldn’t save you, and being citizen part of the year would probably make you have dual tax liabilities.

4 hours ago, Externet said:

Do you think the tax institution will return funds to you corresponding to the collection in advance of about 10 months ?

How do you get 10 months from winning in June? The tax year for most people is the normal calendar year.