Gaming Guru

Ask The Slot Expert (Cruise Ship Winnings - IRS)

I'm a retired senior citizen. While on a 7 day cruise, I hit a $1600 jackpot on the cruise ship slot machine and they issued me a W-2G form. We were in neutral waters off the coast of Canada. The cruise ship is registered in the Bahamas and sails from Seattle. I contested them issuing the W-2 as I thought the IRS had NO jurisdiction in the middle of the Pacific Ocean. They made me sign it or I was not going to get my money. I had them write on the W-2 that it was won in Canadian waters.

Is the cruise line required by the IRS to issue this W-2 form? What is the Internal Revenue ruling on this situation?

Thanks,
Bob

Dear Bob,

I do not know if you should have been issued a W-2G under these circumstances. I'll ask if any of our readers have experiences with hitting jackpots in international waters and post their replies in a future column.

In any case, it doesn't matter with regards to your tax return whether or not you should have been issued a W-2G. You have to declare the jackpot as income even if the casino did not issue a W-2G. I suggest you have your return prepared by a professional this year, if you don't already have a professional prepare your return.

Best of luck in and out of the casinos,
John

Send your slot and video poker questions to John Robison, Slot Expert, at slotexpert@comcast.net.

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