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A crazy lottery ticket scam that allows people to dodge taxes is making a big comeback

A tax scam as old as the lottery is making a comeback — buying losing tickets from others and using them to offset taxes owed to Uncle Sam.

A Business Insider search of Craigslist and Ebay listings found people selling tens of thousands of dollars worth of losing lottery tickets for pennies on the dollar which can then be used to evade taxes by people claiming their actual worth on tax forms since gambling losses can be claimed as deductions.

ABC News and the Daily Beast have uncovered similar listings. Knowledge of the scam dates back to at least the 1980s.

Sellers had bundles of losing lottery tickets valued at anywhere from $US1,000 to upwards of $US76,000 for sale on the websites. In some listings, sellers described how they could be used for tax purposes. Other stopped just short of the suggestion.

IRS lottery ticket scam
IRS lottery ticket scamCraigslistThis Craigslist ad touts the tickets’ use in evading taxes

One seller told potential bidders that he “can get any amount … just message me and I’ll respond right back.”

The listing for $US76,294 in losing New Jersey lottery tickets tells bidders: “Good for taxes.” The lot of tickets, two boxes worth, sold for only $US259 “to fund my sons’ marching band trip to Disney this spring.”

Another listing by the same seller, or $US6,500 in losing New Jersey lottery tickets says: “All from 2014 and can be used for 2014 taxes … if you are in need of a different amount, please message me.”

$US20,000 worth of losing Pennsylvania lottery tickets are also listed on Ebay. The seller claims they can be “used for any purpose.”

IRS lottery ticket scamEbayA person selling more than $US75,000 in lottery tickets
IRS lottery ticket scamEbay

One Craigslist seller wanted $US60 for $US6,500 of losing lottery tickets but deleted the post shortly after it turned up in search results.

The Daily Beast also found similar ads on Ebay and Craigslist.

“Good for tax writeoff for your 2014 taxes to offset your winnings,” the website said one seller wrote on a Jersey Shore Craigslist ad.

Reece Morrel Jr., an Oklahoma CPA who files taxes for gamblers and runs Lady Luck Diary website, explained the ruse to the Daily Beast.

“There is a grey market out there for these lottery tickets,” said Morrel. “There’s companies set up today to rent losing lottery tickets just for your audit.”

IRS lottery ticket scamEbayAnother person selling losing lottery tickets on Ebay

ABC News found similar ads on Craigslist in both Detroit and Tennessee.

“Good for tax write-off for your 2014 taxes to offset your winnings,” the Detroit ad said, according to ABC News.

The most infamous case of using losing lottery tickets to offset winnings happened in the 1980s, tax expert Kelly Erb told ABC News.

A Massachusetts man won a $US2.7 million jackpot and tried to use $US200,000 in non-winning lotto and racetrack tickets to offset some of his tax burden, according to Erb. He was instead caught, pleaded guilty and served time in prison.

The deadline to file 2014 income taxes is only six days away.

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