Question about foreign players in the states

[jokrswylde]

After seeing the amazing month of January that Gorst had, 60k in the month of January alone I think I read, do they have to pay taxes on those winnings here and in their home countries? I get that this month is extraordinary for Gorst and not the norm, but it would suck to get hit twice by taxes.

Did Daz and Shaw relocate to the states in order to avoid this issue? Should we expect more Europeans to relocate with the moves that matchroom is making along with the Predator series? I can see why DO and other Pinoys travel back and forth so often. With the exchange rate their winnings here can go a long way back home, but what about countries where the rate isn't as favorable? I can't imagine that 60k that Fedor won is as impressive if you are factoring in hotel and travel in the states and paying for a home in your home country. It is different for a one off tourney like the MC, but spending month after month in the US can't be cheap.

Just curious how these guys manage the logistics of playing internationally.

 

[Bob Jewett]

After seeing the amazing month of January that Gorst had, 60k in the month of January alone I think I read, do they have to pay taxes on those winnings here and in their home countries? I get that this month is extraordinary for Gorst and not the norm, but it would suck to get hit twice by taxes.

Did Daz and Shaw relocate to the states in order to avoid this issue? Should we expect more Europeans to relocate with the moves that matchroom is making along with the Predator series? I can see why DO and other Pinoys travel back and forth so often. With the exchange rate their winnings here can go a long way back home, but what about countries where the rate isn't as favorable? I can't imagine that 60k that Fedor won is as impressive if you are factoring in hotel and travel in the states and paying for a home in your home country. It is different for a one off tourney like the MC, but spending month after month in the US can't be cheap.

Just curious how these guys manage the logistics of playing internationally.

If a foreign player has no IRS tax ID, the tournament must withhold 30% unless there is a special tax treaty with the player's country. The tournament also must file a 1042 and deposit the withheld money promptly to an IRS account. If a foreign national has money withheld, they can presumably claim that in their home country when/if they report the income.

If a foreign player does have an IRS tax ID, I think the tournament just does a 1099 like for a US citizen. I think the player then files a US tax form like a 1040.

In any case, the tournament must report all significant money paid out. (Used to be $600 or more per individual -- may have changed.) If the tournament does not do the IRS withholding and reporting, it is liable for taxes and penalties on that money whether the players are US or foreign.

FWIW, calcuttas probably fall within this reporting requirement.

 

[Bob Jewett]

Related to which, after dutifully sending in 1042s and 1099s for players in tournaments, I have twice gotten letters from the IRS saying something like, "If Willie Mooch is owed money by you, pay us instead. He has behaved badly."

 

[Fatboy]

They don’t get double dipped

 

[Chili Palmer]

If a foreign player has no IRS tax ID, the tournament must withhold 30% unless there is a special tax treaty with the player's country. The tournament also must file a 1042 and deposit the withheld money promptly to an IRS account. If a foreign national has money withheld, they can presumably claim that in their home country when/if they report the income.

If a foreign player does have an IRS tax ID, I think the tournament just does a 1099 like for a US citizen. I think the player then files a US tax form like a 1040.

In any case, the tournament must report all significant money paid out. (Used to be $600 or more per individual -- may have changed.) If the tournament does not do the IRS withholding and reporting, it is liable for taxes and penalties on that money whether the players are US or foreign.

FWIW, calcuttas probably fall within this reporting requirement.

The 1099 cutoff is still $600

They don’t get double dipped

Correct, generally speaking, they will pay the highest tax rate from any/all entities involved.

 

[Black-Balled]

Related to which, after dutifully sending in 1042s and 1099s for players in tournaments, I have twice gotten letters from the IRS saying something like, "If Willie Mooch is owed money by you, pay us instead. He has behaved badly."

A lot of eyes are watching for reported income.

And a lot of money is paid to those eyes by the people owed.

And very little % is ever collected from the Willie mooches.

 

[Swighey]

I've earned income in the USA in a couple of years when I had no physical presence there. I filed a US tax return for both years and paid the tax. I could have done nothing but it saves a lot of potential hassle later. If your activities are legal it's best to leave a clean paper trail. Any pro pool player would be nuts not to declare their earnings.