Gamblers use eBay to buy losing lottery tickets for tax write-offs

Certain individuals are using eBay to purchase large quantities of losing lottery tickets, such as scratch-offs from Pennsylvania, Ohio, and Florida, to potentially offset taxes on gambling winnings.

While many listings are categorized as collectibles or arts and crafts, some titles explicitly mention “tax write offs” or “tax deduction.” Jeffrey Hoopes, an accounting professor at the University of North Carolina, characterized this practice as a potential form of tax fraud.

Under IRS regulations, gambling winnings must be reported as taxable income. While taxpayers can deduct losses to offset these winnings, the deduction is limited to the amount of winnings reported and requires strict documentation, including receipts and an accurate diary of wins and losses.