Increasing Your 1042-S Refund Chances
Nov 11, 2018
Some may think the title of this piece refers to ways in which to win more in US casinos so that the important items on your 1042-S forms, mainly jackpots, would be bigger but you would be mistaken as this is not the message here today.
We are referring to something very different, yet just as important to those lucky individuals with 1042-S forms looking to recover US gambling taxes. Making sure the 1042-S forms issued to you by a casino are filled out fully and accurately is of the utmost importance to the Internal Revenue Service (IRS) – of this we can assure you. Those who’ve had their gambling refunds rejected for this reason know all about the ramifications as well.
We know this because we deal with the IRS in such matters on behalf of our Canadian and international clients every day. These inaccuracies cause claim rejection and audits as sure as the sun shines and unlike winning a casino jackpot, which again, can be a great deal of fun, having your return rejected or audited can be just the opposite, which makes the task of getting your refund an arduous and potentially expensive prospect – dealing with a foreign tax authority (IRS).
These problems can be avoided by paying attention to what a U.S. casino is including on your 1042-S form when they are issuing it, making sure they include all the important information and nothing, we mean nothing is a more important item than Box 13e, ‘Recipient’s U.S. TIN, if any’. Of course for foreign tax filers this refers to your Individual Taxpayer Identification Number (ITIN), a prerequisite to being able to file a 1040NR – U.S. Nonresident Alien Income Tax Return.
If you don’t have a U.S. ITIN and are not familiar with the process of acquiring an ITIN, look for future articles from us in this respect. However, for the purposes of this article it’s enough to know you need a U.S. tax number and it’s inclusion on your 1042-S forms is of the utmost importance in attempting to streamline the processing of your 1040NR. Again, it needs to be put right on the 1042-S form when the casino issues it to you – so be sure to give it to them at the time of your winning.
Even though you may be excited at the time of your winning don’t forget to give the casino your ITIN to put on your 1042-S form because this could save you considerable time and money and whatever you do, don’t give them a foreign tax number like your Canadian Social Insurance Number (SIN) because this will not work and will only hold up the filing process again, causing lengthy delays until your 1042-S form is properly amended. Again, if you don’t provide an accurate identification number that can be verified by the IRS on your 1042-s forms, look forward to long and potentially expensive delays.
What if you have not filed before and don’t have an ITIN?
As efficient filing advocates with the casinos for years, looking to get them to better take care of their clients in this respect, we have pushed for UNIQUE FORM IDENTIFIER numbers to combat this situation. Many casinos now include UNIQUE FORM IDENTIFIERs on their forms now, which is a primary identifier for those without ITIN’s, and a secondary identifier for those with an ITIN.
The primary thing to realize here is if the IRS has no way to identify you in their computer system and no way of matching your 1042-S claim with the 1042-S credit information sent by the casino who must provide the IRS with COPY A of the 1042-S form set, they must search through a casino’s entire registry to find your credit information. This, ladies and gentlemen, is what can cause delays, audits, and rejections.
If you can believe it, you should also check the casino’s withholding agent’s EIN (Box 12a), name (Box 12d), and of utmost importance again, Income Code (Box 1) – which must be 28 for gambling income claims. We’ve seen problems here too – again causing refunds to be delayed.
Bottom line, if you want your refund to come back smoothly, you need to pay attention to the quality of the information casinos are putting on your 1042-S forms.
If you need further help in this regard, we would be happy to help.
