The beginning of football season can also mean illegal gambling activity, and IRS Criminal Investigation (CI) warned that such activity can result in criminal charges ranging from money laundering to tax evasion.

Between 2021 and 2023, CI initiated more than 100 investigations into illegal gambling activity totaling more than $178 million. Of these, 89 cases resulted in indictments, with a 96 percent conviction rate for prosecuted cases. The average prison sentence for adjudicated cases was 23 months.

"Sports betting is all fun and games until funds are laundered and individuals fail to meet their tax obligations," said IRS Criminal Investigation Chief Jim Lee. "As this year's football season kicks off, CI special agents are leaning on public-private partnerships and paying close attention to data gleaned from a variety of sources such as currency transaction reports and suspicious activity reports to Forms 8300 that indicate criminal activity like money laundering and tax evasion."

Taxpayers who bet on sports must report their winnings on their annual tax return using Form W-2G. The IRS also encouraged individuals to keep detailed records of all gambling transactions, including bets placed, winnings received and losses incurred.

The IRS advised sports enthusiasts who are unsure about their tax obligations or have questions about reporting gambling income to consult tax professionals or visit the official IRS website for guidance. It noted that ignorance of the tax law does not exempt individuals from their responsibilities.