Gamblers purchase losing lottery tickets on eBay to claim tax deductions
Buyers are acquiring bundles of non-winning scratch-off tickets on eBay, listing them as tax-write-off items to offset gambling winnings.
A number of sellers on eBay are offering large quantities of worthless scratch-off tickets, advertising them as collectibles or tax-write-off assets. Prices range from $10 for a pound of Pennsylvania tickets to $575 for $90,000 worth of Florida tickets. Tax professionals explain that gambling income must be reported, and only those who itemize can deduct verified losses, provided they keep thorough documentation.
The IRS mandates receipts, statements or tickets to support the deduction. eBay’s policy permits the sale of expired tickets when clearly labeled as such, but bans listings that encourage illicit tax practices. The platform maintains that it merely facilitates peer-to-peer transactions and does not hold inventory, leaving liability questions open. Professor Jeffrey Hootes, an accounting scholar at the University of North Carolina, observes that some buyers may simply collect the paper, while others likely seek to fabricate documentation for tax purposes.
Why it matters
The practice exploits tax rules, potentially enabling illegal deductions and undermining tax compliance.
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