The IRS has the potential to collect over a billion dollars in taxes from unreported wagering income. It highlights that this estimate is based on Forms W-2G that lack taxpayer identification numbers (TINs) and report gambling winnings exceeding $5,000 without federal tax withheld. The IRS is supposed to enforce backup withholding when a correct TIN is not provided. However, the specific reasons for the lack of withholding in these cases remain unclear without further investigation.
https://www.tigta.gov/sites/default/files/reports/2024-10/2024300064fr.pdf