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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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It appears I have won over one million dollars from Kentucky

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It appears I have won over one million dollars from Kentucky Fried Chicken Malaysia International Promotion. I am a US Citizen. Are these monies taxable. I am being questioned as to my method of receipt: either direct delivery to my home address in my hands or transferred into a bank.

Please advise.

Lev :

Hi and welcome to our site!
As you are an US citizen - you are required to report all your worldwide income on your US income tax return.
That includes winning prices that are included into taxable income.
The winning is subject of mandatory withholding - so regardless if you will receive a check or the money would be transferred directly to your bank account - he winnings are subject to 25% regular gambling withholding.
The payer will issue you form W2G - to report the winning amount and withholding.

Lev :

Please be aware that sometimes - there might be fraud "promotions" - so if you are asked to pay any money upfront - you might want to be very careful and verify all information about your contacts.
Here is the address to verify - KFC Corporation 1441 Gardiner Lane Louisville, Kentucky 40213
Specific contacts in Malaysia :
Level 16, Wisma KFC, No. 17, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia.
Tel: 03-2026 3388 (Hunting Line) Fax: 03-2078 9923

Customer:

Hi, Lev,

Lev :

Hi

Customer:

Great information and I appreciate the reference to the KFC Corp. I have been communicating with Kuala Lumpur and I checked the KFC Malaysia Season Promotion on the list of 2000 fraudulent promos and it is not on there. So I'm moving forward. I have not been asked for any monies. However, I am concerned about them preferring to deliver the check to me personally rather than using Option 2 transfer by wire. Do you have any idea why they would prefer the "in your hand" delivery, Option 1 rather than the wire transfer, Option 2. They also refer to an International promo remittance policy handbook (ILRPH). Do you know where to obtain this?

Lev :

From tax prospective - there is no difference.
As long as the payment will be in US dollars and your bank do not have additional charges for neither depositing a check nor for wire transfer - I do not see any difference.

Lev :

International promo remittance policy handbook (ILRPH) - when I googled that name - it pointed me to multiple lottery scam discussions. So - I am afraid that you would be asked for the upfront money at some point. So be very careful.
If there are any income tax liability or required withholding either in the US or in Malaysia - that money may not be requested upfront - but should be withheld from the amount due. As soon as you would be asked for money upfront - for any reason - that would be a warning signal.

Lev :

Here is an example - https://go4answers.webhost4life.com/Example/microsoft-corporation-49411.aspx


and there are many similar
Be advice that it is highly imperative that we inform you of some of the required procedures pertaining to filing for your claims with reference to clause fourteen, page thirty four of the International promo remittance policy handbook (ILRPH), you have two options from which you are to choose in receiving your prize money.
*OPTION ONE: VIA COURIER/POST:we will have his/her winnings cheque and certificate delivered at the winner’s doorstep.


*OPTION TWO:TRANSFER VIA BANK ACCOUNT:the funds will be transferred to the winner in cash via Online Bank Transfer.

Customer:

Here is the exact verbiage I received for Option Two:

Customer:

*OPTION TWO
TRANSFER VIA BANK ACCOUNT.

The winnings will be transferred to the winner in cash. Under option one, beneficiaries
will be required to go through the services of an affiliate delivery service. This delivery
service has been mandated with the task of dispatching all cheques of winners who
choose to opt for the courier option.

Lev :

That makes me very suspicious... "affiliate delivery service" might ask you for "delivery fees"
But still I suggest to verify.

Customer:

Thanks. You have been very helpful.

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