Superbowl Sunday is perhaps the biggest one day celebration in all of America.  It’s that one day when everyone, from your office secretary to your betting buddies at the local pub, put down some bucks in Superbowl office pools or place bets legally and illegally.  Some are estimating that more than $10 billion will be bet this year on Superbowl Sunday on office pools, football final scores and even what team wins the coin flip. 

Regardless of the gambling venue, bettors are required to report winnings on income-tax returns. How seriously people take this responsibility is anyone’s guess.

It seems that most people don’t really know that they are supposed to report it on their federal income tax return.  According to one H&R Block survey, only one-third of those responding realized gambling winnings are taxable.

If you receive money, prizes or awards like a trip or new car from a lottery, a local raffle, a casino or sports betting, you are supposed to report the winnings as income on Schedule A of your federal-tax return. You could be subject to estimated tax payments on your winnings as well.

If you win an office pool, you technically are supposed to report it.

But the IRS is more concerned about Internet betting, which is easier to track through credit cards. And the most likely time a gambling situation could come to the IRS’ attention is during an audit.

Gambling losses are deductible, but only to the extent you use them to reduce winnings. In other words, you can’t deduct net losses. And if you are deducting losses, the IRS requires an accurate log of your betting.

“The larger gamblers do keep track,” said Taylor, adding that a lot of casinos furnish tracking cards on request.

Here are the Top 10 On the IRS Tax Evasion List:

1. Besides not paying taxes on gambling winnings
2. Not reporting all income from working, investments or unemployment benefits, it’s all income in the eyes of the IRS
3. Reporting children’s investment income is also a problem
4. Not paying the nanny tax
5. Not reporting annual gifts of more than $12,000 ($13,000 in 2009) to any single recipient
6. Claiming charitable deductions for more than the items are worth
7. Exaggerating expense deductions
8. Not filing a tax return
9. Filing an incomplete tax return
10. Claiming an economic-stimulus tax rebate for more than you’re qualified.

Charles Rangel, the chariman of the House Ways and Means Committee, helped  preserve a lucrative off-shore tax loophole for an oil drilling executive. This issue has prompted the House ethics committe to expand the inquiry on the matter.

Rangel is a powerful New York Democrat who insists the charges are false. But is it just coincidence that the businessman linked to the scandal pledged $1 million for a planned Charles B. Rangel Center for Public Service at the City College of New York?

Beyond suspicions about the offshore tax loophole worth tens of millions, the panel must look into Mr. Rangel’s use of congressional letterhead to solicit support for his eponymous center. Then there’s his use of rent-stabilized apartments in Harlem at cut rates and his failure to pay taxes and disclose $75,000 in income from a Dominican villa on which he enjoyed an interest-free mortgage.

The ramifications are great. It could lead to Rangel giving up his chairmanship while the investigation proceeds.  House speaker Nancy Pelosi is in a tough position – she needs to act on the matter on this Democratic party member.  She needs to urge Rangel to step down.  If he doesn’t, she needs to remove him.

Ethics violations by a public servant in such a high position cannot be tolerated.  His power in making decisions regarding huge fiscal and tax issues means there can be no doubts about the leadership’s priorities.